Despite volatility in the secondary markets, initial public offerings (IPO) of Alkem Laboratories and Dr Lal PathLabs managed to get fully subscribed on the second day of the three-day issue. At 5 pm the IPO of Alkem was subscribed 1.41 times while the public issue of Dr Lal PathLabs was subscribed 1.24 times, stock exchanges data showed. Both the companies put together would raise close to Rs 2,000 crore from the primary markets.

The success of both the IPOs was on back of strong response from the qualified institutional buyers (QIBs). The QIB book of Alkem was subscribed 2.33 times as 58.58 lakh bids were received from qualified institutional buyers  against 25.11 lakh reserved for the category. In Dr Lal PathLabs issue, 34.08 lakh subscriptions were received from QIBs against 23.2 lakh shares reserved for them taking the subscription to 1.47 times.

Even the retail book of both the companies managed to get fully subscribed. Retail portion of Alkem was subscribed 1.28 times while retail book of Dr Lal PathLabs was subscribed 1.41 times, data showed. This is in contrast with last few initial public offerings where retail books received tepid response. The initial public offering of InterGlobe Aviation last month was subscribed 6.15 times, however the retail book received less than 100% subscription.

Alkem is a pharmaceutical company with global operations, engaged in the development, manufacture and sale of pharmaceutical and neutraceutical products. For fiscal year 2015, it was the fifth largest pharmaceutical company in India in terms of domestic sales.

Dr Lal PathLabs is a provider of diagnostics and related healthcare tests and services in India. The New Delhi-based company has a catalogue of 1,110 test panels, 1,934 pathology tests and 1,561 radiology and cardiology tests to undertake the entire gamut of routine and specialised tests. Customers include individual patients, companies and institutions, healthcare providers as well as hospital and clinical labs.

So far 18 companies have raised close to Rs 11,000 crore from the primary markets during CY15, Prime Data showed.

Initial public offer of Dr Lal Pathlabs received an overwhelming response from investors as it was oversubscribed by 2.04 times till 4.32 pm on the second day of the issue on Wednesday.

Initial public offer of Dr Lal Pathlabs received an overwhelming response from investors as it was oversubscribed by 2.06 times till 5.00 pm on the second day of the issue on Wednesday. The public offer hit Dalal Street on December 8 and will close on December 10. Price band for the offer has been fixed at Rs 540-550 per share.

According to the data available with NSE (till 5.00 pm), the Rs 638-crore IPO received bids for 1,67,53,400 shares against the total issue size of 81,20,000 shares.

The portion of shares set aside for qualified institutional buyers (QIBs) and retail individual investors were subscribed 5.88 times and 0.58 times, according to the stock exchange data.

Dr Lal PathLabs has raised over Rs 191 crore from anchor investors by selling shares at a price of Rs 550 apiece.

Kotak Mahindra Capital Company and Citigroup Global Markets India Private are the book running lead managers to the issue.

Share price of logistics companies fell sharply on Wednesday after the Opposition Congress party disrupted a Parliament session on Tuesday

Share price of logistics companies fell sharply on Wednesday after the Opposition Congress party disrupted a Parliament session on Tuesday accusing the government of pursuing a “vendetta” against the Gandhi family.

It faded hopes that goods and services tax (GST) would be cleared in the ongoing winter session of Parliament.

Logistics major Container Corporation of India fell 5.59 per cent to Rs 1,340 on Wednesday. Others such as Allcargo Logistics, VRL Logistics, Aegis Logistics and Gateway Distriparks slid 5.10 per cent, 1.85 per cent, 6.45 per cent and 1.15 per cent, respectively. Gati slid the most and closed 8.46 per cent down at Rs 151.40.

Chandan Taparia, analyst, Anand Rathi Securities said, “If GST will not clear in the ongoing Winter session then it will delay till 2017.” However, the government has plans to introduce GST from April 2016.

According to Finance Minister Arun Jaitley, the implementation of the GST could augment India’s GDP by 2 per cent. According to market experts, the sectors to benefit the most would be logistics, E-commerce, automobile, and FMCG among others.

Bharat Forge management acknowledged weak demand in US truck and O&G segments and said it expects to maintain revenues as compared to FY15 driven by ramp up of passenger vehicle business. (Photo: Reuters)

Bharat Forge shares dipped as much over 6 per cent on Wednesday after the company presented a flat revenue outlook for 2016 at its investor meet.

At 1.03 pm, shares of the company were trading 3.91 per cent down at Rs 795.05. The shares opened at Rs 804.90 and had touched a high and low of Rs 808.15 and Rs 772.85, respectively, in trade so far. The BSE Sensex was trading 108.04 points down at Rs 25,202.29 during the same time.

At the investor meet, the company management acknowledged weak demand in US truck and O&G segments and said it expects to maintain revenues as compared to FY15 driven by ramp up of passenger vehicle business. The company added that there is a sharp volume drop in commodity and allied business (Construction, mining, oil and gas).

“The company’s near term revenue traction will be weak (flat FY16 revenues), management reiterated its guidance of – a) doubling standalone revenues to Rs 70bn by FY18; b) becoming net debt free by 2018; and c) increase passenger vehicle revenue share from 5 per cent to 15 per cent,” accordign to brokerage house JM Financial.

The brokerage house also maintained its ‘Hold’ rating at a target price of Rs 925 as it remained confident on Bharat Forge’s medium-to-long term growth story. However, it sees share price ranged in the near term due to – low visibility on demand recovery, earnings downgrade risk and elevated valuations.

BSE Sensex lost 859.08 points, while NSE Nifty shed 253.20 points during the last 5 days. (Photo: PTI)

The domestic benchmark indices – Sensex and Nifty – corrected 3 per cent in the past five trading sessions till December 8. BSE Sensex lost 859.08 points, while NSE Nifty shed 253.20 points during the period.
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Among the sectoral indices on the BSE, the BSE PSU index fell the most — 5.25 per cent in the past five trading sessions, it was followed by BSE Metal index (down 4.83 per cent), BSE FMCG index (down 4.54 per cent), BSE Power index (down 4.13 per cent) and BSE Realty index (down 4.06 per cent). Rest all other sectoral indices also fell during the period.

Foreign Institutional Investors (FIIs) stood net seller in Indian equities and sold shares worth Rs 4,208 crore during Dec 1 – Dec 8. On the other hand, Domestic Institutional Investors (DIIs) bought shares worth Rs 2,242 crore during the same period.

Gaurav Jain, director, Hem Securities, said, “Crude oil prices hitting new lows, continued selling pressure from domestic and foreign investors and hindrance in smooth functioning of winter session of Parliament causing concerns on passing of key reform bills mainly GST dampened the sentiment of the Street.”

The BSE Midcap index and BSE Smallcap index outperformed the broader market indices.

Barring the share price of Bajaj Auto (up 0.05 per cent) and Sun Pharma (up 5.56 per cent), rest all other stocks in the 30-share index gave negative return to investors in the past five trading session. ITC, ONGC, Vedanta and Coal India declined 8.94 per cent, 8.20 per cent, 7.59 per cent and 6.90 per cent, respectively, and remained among top losers.

We  give a list of companies that could be good investment bets as suggested by brokerage houses in the current market scenario.

Investment Options
Amara Raja Batteries
Recommended By: Angel Broking
Target Price: Rs 1,040
Why Buy: Amara Raja is a well diversified auto ancillary player having presence across the automotive and the industrial segment and a broad OEM as well as replacement customer base. According to Angel Broking, Amara Raja Batteries is a high quality stock to play the auto sector revival. The scrip was trading at Rs 835.80 in the morning trade on Wednesday.

HDFC Bank
Recommended By: Angel Broking
Target Price: Rs 1,262
Why Buy: The bank’s credit and deposit growth continues to beat the industry growth rate, driven by dominant market position in most retail business segments, healthy CASA and continued network expansion. This provides strong visibility for a robust 20 per cent earnings trajectory, coupled with high quality of earnings on account of high quality retail business and strategic focus on highly rated corporates. Shares of HDFC Bank was at Rs 1054.15 on Wednesday at 10.41 am.

MT Educare
Recommended By: Angel Broking
Target Price: Rs 169
Why Buy: MT Educare has strong positioning in the Secondary School and Higher Secondary
School coaching business in Mumbai location (contributes around 80 per cent to the overall revenue). The company , this year, has introduced a technology, the unique – Learning Management System (LMS) – for strengthening its offering in its core business. MT Educare to report a healthy top-line performance, going forward, on the back of strong growth across the pre-university (PU) college business, Shri Gayatri Educational Society (SGES), and the Lakshya business. Further, the company to report a strong growth in the CA segment in Tamil Nadu and Mumbai. The scrip was trading at Rs 134 points in the morning trade.

Housing Development Finance Corporation
Recommended By: Sharekhan
Target Price: Rs 1,400
Why Buy: According to the management of Housing Development Finance Corporation (HDFC), the high-margin non-individual loans (29.1 per cent of loan book) have shown some signs of recovery over the past couple of quarters (8 per cent YoY). Even as the company remains conservative on developer loans, it expects growth could be much better over the next three to four quarters, given a low base and pent-up growth that may kick-in. On the other hand, the individual loans continue to report healthy growth of 23 per cent (in Q2FY2016) including loans sold. The reduction in interest rates coupled with pick-up in economic growth could drive growth in mortgages. HDFC was trading at Rs 1,163 at 10.42 am on December 9.

Persistent Systems
Recommended By: Sharekhan
Target Price: Rs 820
Why Buy: Persistent Systems is moving in the right direction to create newer services, products and platforms in the digital space to accelerate the growth momentum. It has already started seeing signs of success though on a small scale. Sharekhan believes the meaningful effects on financials from the newer offerings will take time to reflect in earnings. However, given the growth momentum in enterprise segments and bottoming out of ISVs segment coupled with inorganic strategy to drive growth in IPs revenues will accelerate growth in FY2017 (the management has also indicated at growth to resume soon). For H2FY2016, the management expects revenue growth to be better led by the integration of Aepona Holdings (annual run rate of $10 million) and the launch of a new version of TNPM 2) in the next two quarters, though kept its guidance for FY2016 at 10-12 per cent. It expects margins to be affected from the integration cost of Aepona Holdings. The share price of Persistent Systems was down 1.80 per cent at Rs 676.35.

Disclaimer: The stocks are recommended by the respective brokerage houses and not a recommendation from Financial Express online.