Street Signs: Aeroflex GMP surges over 60%, direct MF platform norms & more

Fear’s up: Bulls retreat, bears out

The India VIX Index, a gauge of market volatility, has surged by more than 20 per cent in the past three weeks amid a gradual decline in the benchmark National Stock Exchange Nifty. While the VIX reading still remains a benign 12, the recent surge suggests a bearish turn in sentiment, according to analysts. “The India VIX, known as the fear indicator, has risen from 10.14 to 12.14 in the past three weeks, causing significant discomfort for the bulls,” says Ashwin Ramani, derivatives and technical analyst at SAMCO Securities. He adds that it is crucial for the Nifty to maintain levels around 19,265, the 50-day exponential moving average. “A close below the 19,265 level could further intensify selling pressure and push the index down to 18,600 levels. Conversely, a strong close above 19,500 could rekindle lost enthusiasm among buyers,” says Ramani. On Friday, the Nifty closed at 19,310, marking a 3.4 per cent decrease from its peak a month ago.

Direct MF platform norms by Amfi soon

‘Direct’ mutual fund (MF) distribution platforms seeking to become agents of asset management companies will soon have the opportunity to do so. Following a series of deliberations over the past two months, the Association of Mutual Funds in India (Amfi) is expected to release the guidelines this week. The guidelines will primarily pertain to the criteria for qualifying as an execution-only platform, the registration process, and the permissible fees. The regulation, which takes effect in September, mandates that online platforms engaged in distributing ‘direct’ MF schemes must either register with Amfi or register as a stockbroker with the Securities and Exchange Board of India.

Aeroflex GMP surges over 60% prior to Rs 350 crore IPO

Aeroflex Industries, a Mumbai-based leading hose manufacturer, is witnessing strong demand for its shares in the grey market despite a series of moderately valued listings recently. According to market sources, the company’s shares are commanding a grey market premium of over 60 per cent ahead of its Rs 350 crore initial public offering (IPO), scheduled to open on Tuesday. The company, backed by renowned investor Ashish Kacholia, has priced its issue in the range of Rs 102 to Rs 108. At the upper end of the range, Aeroflex is valued at nearly Rs 1,400 crore. The IPO comprises a fresh fundraise of Rs 162 crore and an offer for sale of Rs 189 crore. In 2022-23, Aeroflex recorded a net profit of Rs 30 crore on revenues of Rs 270 crore. Analysts suggest that based on current orders and capital expenditure plans, the company could achieve revenues of Rs 400 crore in 2023-24 and also witness expansion in profit margins due to economies of scale.