Street signs: Trend weak on FPIs, Electronics Mart India IPO, and more

Trend weak on FPIs raising bearish bets

Friday’s sharp upmove notwithstanding, the markets remain on a weak footing as foreign portfolio investors (FPIs) continue to raise bearish bets. “FPIs have rolled over their short positions in the index futures segment, which indicates their bearish stance for the October series. As of now, we are reading Friday’s upmove as just a pull-back within a short-term downtrend. Our markets are not out of the woods yet. They could continue to see higher volatility and witness selling pressure at higher levels,” says Ruchit Jain, lead research, 5Paisa. Technical analysts say the immediate support for the Nifty is at 16,500-16,700 levels. On the upside, there is immediate resistance at 17,200. The Nifty last closed at 17,094.

Electronics Mart’s grey market premium at 50%

Shares of Electronics Mart India (EMIL) are changing hands at a premium of 50 per cent ahead of its initial public offering (IPO). The stock is changing hands at Rs 90-91 per share, against its price band of Rs 56-59 per share, according to websites tracking the grey market. EMIL’s Rs 500-crore IPO opens for subscription on Tuesday and closes on Friday. EMIL is a leading consumer durables and electronics retailer in India with 1.12 million square feet of retail business area. The company will use the IPO proceeds for store and warehouse expansion and to retire debt. In 2021-22, the company had clocked net profit of Rs 104 crore on a revenue of Rs 4,349 crore. At the upper end of the issue price, EMIL is valued at Rs 2,270 crore.

Tile makers pave the way for sales recovery

Analysts are upbeat on shares of ceramic tile manufacturers, even as their July-September quarter performance is likely to be weak. At present, the vitrified segment is facing the dual issue of sluggish demand and elevated levels of gas costs that may weigh on its performance during the just-concluded quarter. Analysts say any weakness in stock prices could be a good buying opportunity from a medium-term perspective. An uptick in the housing cycle, strong housing demand from smaller cities, and pick-up in export momentum are likely to aid recovery in sales of ceramic tiles, they observe. Moreover, moderation in energy prices, focus on value-added products, and benefits of price hikes are likely to improve profitability. Kajaria Ceramics and Somany Ceramics are among the stocks recommended by analysts.
Contributed by Sundar Sethuraman