Street signs: Retail, HNIs pare bullish bets, cashing in on LIC IPO & more

Domestic brokerages are pulling all stops to cash in on the excitement around LIC's initial public offering (IPO).

Retail, HNIs pare bullish bets

Retail and high networth individuals (HNIs) have been aggressive buyers over the last several months. However, the Russia-Ukraine conflict, the US Federal Reserve’s hawkish pivot, and surge in oil prices seem to have made a dent in sentiment. Data shows, they have scaled back their bullish bets in the derivatives market. “HNI and retail have unwound their single stock futures (SSF) long positions drastically. At the start of the February series, their net longs in SSF were 1.42 million contracts (record high) versus 1.12 million now,” said Abhilash Pagaria, head, Alternatives Research, Edelweiss Securities.

Short IOC, long HPCL

NSE Indices has announced that Indian Oil Corporation (IOC) will be replaced by Apollo Hospitals Enterprise (AHEL) in the Nifty50 index with effect from March 30. The rebalancing is expected to lead to inflows of Rs 1,409 crore in AHEL and outflows of Rs 882 crore in IOC by passive funds tracking the Nifty50 index. Analyst Brian Freitas, who publishes on Smartkarma, says one can also look to short IOC and long Hindustan Petroleum (HPCL) in the derivatives market. “IOC has outperformed HPCL recently and provided a good opportunity to enter a short IOC/long HPCL trade. With nearly 20 days of delivery volume to sell, IOC (on account of the Nifty rebalancing) could underperform HPCL in the next few weeks,” he says.

Cashing in on LIC IPO 

Domestic brokerages are pulling all stops to cash in on the excitement around Life Insurance Corporation’s (LIC’s) initial public offering (IPO). In order to encourage first-time investors and LIC policy holder towards their platform, broking houses are offerings sops like free account opening, fee waivers, and discount vouchers. Religare Broking has launched a dedicated app for the LIC IPO, which offers free account opening and pre-application for the mega IPO. More players are expected to unleash similar offerings in the coming weeks, say industry watchers. Many new accounts are expected to be opened during the IPO, which is expected early March.