 "Street signs: Sebi NAV rule, more bumper listings on the cards, and more")
Sebi NAV rule to benefit index funds
Market players believe the new Sebi rule on net asset values (NAVs) will help capture the transactions on both asset and liability sides without any lag, thereby minimising the tracking error for index funds. Earlier, investors who put in below Rs 2 lakh got the NAV of the same day irrespective of when the money (cheque) was realised. This impacted index funds, especially during volatility. The total AUM of index and ETF funds (excluding gold ETFs) stood at Rs 2.19 trillion at the end of August 2020.
Ashley Coutinho
More bumper listings on the cards
The last two IPOs of Happiest Minds and Rossari Biotech witnessed bumper listings. The trend is likely to continue with future listings, if grey market activity is any indication. Market players said Route Mobile, which lists on Monday, could see Day-1 pop of 70 per cent. Also, shares of Chemcon Specialty, whose IPO opens on Monday, are commanding a premium of more than 60 per cent in the grey market. “Given the attractive premia, IPOs are seeing a surge in applications by retail investors. This is reducing the probability of successful allotment. In Happiest Minds IPO, only 1 of 45 retail investors got an allotment,” said an analyst.
Sundar Sethuraman
RIL, TCS move lockstep
A few years ago, the market capitalisation of Reliance Industries (RIL) and Tata Consultancy Services (TCS) used to move lockstep, with both taking turns to become India’s most valued. The sharp rally this year, however, has seen RIL take a huge lead over TCS in terms of market cap. Last week, the market cap of RIL surpassed Rs 16 trillion, while TCS crossed Rs 9 trillion. Interestingly, last week the price of both these stocks quoted around similar denomination. “Even though symbolic, the stock prices for both RIL and TCS started last week around same levels at Rs 2,400. It will be interesting to see which stock ends ahead in 2020 from current levels,” said a market expert.
Samie Modak
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