The Indian markets managed to post its third consecutive weekly gain, treading waters amid lacklustre bluechips earning numbers and largely unexciting economic data (Photo: PTI)

Stocks: The Indian markets managed to post its third consecutive weekly gain, treading waters amid lacklustre bluechips earning numbers and largely unexciting economic data led both the BSE Sensex end above the key 27,000-levels and the broader Nifty above 8,200-mark.

Dealing in IT segments ruled the roost during the weeks mostly range-bound trade, with the IT major Infosys notable September quarter net profit imperiled by disappointing lower revenue forecast, while the IT service major TCS dull Q2 number added selling pressure on software stocks throughout the week.

The momentum was further jeopardized by rising September CPI inflation data, thinning exports due to global slowdown pressure along with weak Chinese economic data, though the market players shrugged of the strong macro indicator of IIP data of nearly three year highs.

Equities turn-around witnessed from the fourth session of the week amid firm global rally with weak US economic data further optimized the delay in Federal Reserve raising of its key interest rates this year, as the buying in heavy weights like Tata Motors which gained after its Jaguar Land Rover unit reported a 3 per cent rise in September sales as well as fundamentally strong stocks led the key indices to recapture its psychological-levels.

The Sensex resumed higher at 27,242.60 and hovered between a high of 27,305.04 and a low of 26,713.28 before closing at 27,214.60, showing a gain of 135.09 points or 0.50 per cent.

It has gained 1,351.10 points or 5.22 per cent in three weeks.

The CNX 50-share Nifty also moved-up 48.45 points, or 0.50 per cent, to 8,238.15. It has also gained 369.65 points of 4.70 per cent in three weeks.

Buying was mainly seen in Capital Goods, Auto, Oil & Gas, Power, Metal, Banks, Consumer Durables and PSUs also supported by shares of mid-cap and small-cap shares.

However, selling was led by IT, Tech, HealthCare and FMCG counters. Meanwhile, the foreign portfolio investors bought shares net Rs 1,636.07 crore during the week as per the Sebi’s record including the provisional figure of October 16.

In the domestic market, 23 scrips out of the 30-share Sensex pack ended higher while, 7 others finished lower.

Major gainers were Tata Motors (8.51 pct), Bhel (5.62 pct), Vedl (4.83 pct), SBI (4.81 pct), Hindalco (4.72 pct), Gail (4.37 pct), Maruti (4.14 pct), Larsen (3.78 pct), Axis Bank (2.96 pct) and Reliance (2.92 pct).

However, Infosys fell by (6.34 pct), followed by TCS (5.85 pct), HUL (3.98 pct), Wipro (2.57 pct), Sun Pharma (1.89 pct) and Cipla (1.32 pct).

Among the S&P BSE sectoral indices, Capital Goods rose 2.96 pct, Auto 2.74 pct, Oil&Gas 2.40 pct, Power by 2.37 pct, Metal 2.14 pct, Bankex 2.00 pct and Consumer Durables 1.86 pct while, IT fell by 4.48 pct and Teck 3.57 pct.

Small-cap and Mid-cap indices rose by 147.12 points or 1.30 pct and 110.16 points or 1.01 pct respectively, on persistent buying from retail investors.

The market fell in three out of five sessions of the week.

The total turnover during the week on the BSE and NSE fell to Rs 14,043.10 crore and Rs 74,961.14 crore respectively, as against the last weekend’s level of Rs 15,614.86 crore and Rs 86,658.20 crore.

India’s biggest coffee chain operator Coffee Day Enterprises received nearly twice as many orders for its up to $177 million initial public offering before the Friday deadline as investors sought to buy into a rapidly growing cafe culture. (Reuters)

India’s biggest coffee chain operator Coffee Day Enterprises received nearly twice as many orders for its up to $177 million initial public offering before the Friday deadline as investors sought to buy into a rapidly growing cafe culture.

The IPO, the biggest in India in nearly three years, would value Coffee Day at as much as $1 billion. The company is backed by private equity firm KKR & Co and counts Starbucks Corp’s India joint venture as its main rival.

“The pricing was pretty fair and that got the institutional demand going,” said an investor whose fund bought shares, and who declined to be named as he was not authorised to speak to the media.

As of 1030 GMT, Coffee Day had received bids for 45.7 million shares, more than the 25.8 million shares on offer, according to exchange data. Books close at 1130 GMT.

The strong demand for the IPO contrasts with the overall weakness in the stock market caused by China’s economic slowdown and concerns about global liquidity. The broader NSE index is 9.7 percent lower than a record high hit in March.

Investors see potential in India’s cafe market which is worth 18.2 billion rupees and growing at 20 percent annually, according to consultancy Technopak, as more younger, urban consumers opt for cappuccinos over tea.

Coffee Day Enterprises was selling shares at between 316 rupees and 328 rupees each. The listing is set to debut on Nov. 2 and would be the biggest since Bharti Infratel Ltd’s $751 million IPO in December 2012.

Earlier this week, Coffee Day announced it had raised 3.34 billion rupees from “cornerstone” IPO investors, including Blackrock.

The Coffee Day offer is set to be followed by InterGlobe Aviation Ltd ‘s $400 million IPO on Oct. 26.

But the IPO pipeline will thin after this deal, as volatile global markets and tepid performance at home scare off potential candidates.

Maintain ‘equalweight’ on Mindtree and raise price target to R1,455 (earlier R1,300 per share). Mindtree continues to generate strong revenue growth ahead of many larger peers in the industry. Despite client-specific issues in FY16, we expect it to register $ revenue growth of 14% (NASSCOM estimate of industry growth of 12-14%) excluding the recent acquisitions.

We believe that with consistent strong revenue growth, margins could improve and drive stronger earnings growth (17% CAGR over F16e-18e). One-year forward P/E multiple of 18x looks sustainable given industry-leading revenue growth, but upside from here appears limited, even in view of our increased estimates.

Mindtree’s organic revenue growth of 8.1% Q-o-Q was one of the strongest rates in the last 16 quarters. Order in take at $193 million remains robust. Ebit margin improved to 15.8% (+146 bps q-o-q, -131 bps q-o-q) versus our 15.6% estimate. Net income of R1.58 billion (+14.5% q-o-q, +15.1% y-o-y) was ahead of our estimate and the Street.

Revenue growth (excluding Bluefin and Relational acquisitions) was ~12% y-o-y in H1F16, and management sounded extremely confident about exceeding the 12%–14% range for FY16e exacquisitions. We expect US Dollar revenue growth of ~14% y-o-y (ex Bluefin and Relational) and ebit margin of 15.5% (-150 bps y-o-y), leading to EPS growth of 15% for FY16e.

Stocks of telecom companies declined nearly 1% on Friday after the sector regulatory, Telecom Regulatory Authority of India (Trai), issued a directive asking telecom services providers to compensate users for dropped calls. Stocks of telecom firms opened under intense selling pressure and lost 2-3%. However, during the last one hour of trading, these stocks partially recovered due to short covering and strong recovery in the broader markets.

Idea Cellular lost 1.44% during the session, while Bharti Airtel declined 0.46%. Scrip of state-owned MTNL closed down 0.54%, while Tata Communications lost 0.45%. Reliance Communications was the only exception, with the stock climbing 4.35%.

As per the new directives, telecom operators will have to compensate consumers by Re 1 per dropped call with effect from January 1, 2016. Trai  has, however, fixed a cap on the compensation to maximum of three calls per day. The regulator said it is of the view that the mandated regime would provide relief to customers from the menace of call drops to some extent and spur service providers to improve quality of service.

The directive of Trai  comes after Prime Minister Narendra Modi and various top officials raised concerns over the call drop issue. Two months ago, Modi conducted a high level meeting where he observed that the call drop problem directly affected the common man.

Telecom scrips have been under selling pressure since the beginning of Q2FY16. Shares of Bharati Airtel have lost more than 16% during the period, while Idea Cellular has been down by more than 14%.

Kotak Institutional Equities observed in a note to investors that Q2FY16 would be a tepid quarter for the telecom sector, as voice and data volumes are going to witness a modest slowdown, thereby impacting the revenue growth of the companies.

“We expect voice traffic decline of 3-4% q-o-q while flat voice RPM and data revenue growth would be in low-double digits. Bharti Airtel and Idea would see a decline in the margins q-o-q,” said Rohit Chordia, associate director, Kotak Institutional Equities.

In the biggest IPO in nearly three years, leading coffee chain operator Coffee Day Enterprises’ Rs 1,150-crore public issue was over-subscribed 1.81 times on the last day of the bidding today. (Reuters)

The initial public offering of Coffee Day Enterprises received 1.81 times the subscription on the closing day on Friday, with strong backing from institutional investors, and a tepid response from high-networth individuals and retail investors. At end of Friday’s subscription, the company is now assured of Rs1,150 crores it had planned to raise through the IPO.

Qualified institutional bidders (QIBs) continued to exhibit their confidence in the largest IPO deal since December 2012, stock exchange data showed Friday. Institutional investors bid for 3.23 crore shares as compared to 73.80 lakh shares reserved for the category, data showed. The QIB book was subscribed 4.39 times.

The non-institutional category – comprising of high net-worth individuals (HNIs) – bid for 29.20 lakh shares against a reservation of 53.88 lakh shares. The book was subscribed 0.54 times and experts said the weak undertone in secondary markets made margin funding risky.
Retail category was subscribed 0.9 times as investors applied for 1.13 crore shares against an offering of 1.25 crore shares on offer.

On Tuesday, the Bengaluru-based company had raised around Rs 334.27 crore through a pre-IPO placement to anchor investors. A little over 1.03 crore shares were allotted to 17 institutional investors at a price of  Rs 322 apiece. List of anchor investors included Blackrock, Government Pension Fund Global, ICICI Prudential Mutual Fund, Merrill Lynch, Swiss Finance Corp and Axis Mutual Fund.

The public issue, which closed on Friday, is priced at Rs 316-328 per piece. The company aims to raise a total of Rs 1,150 crore public investors to pay back existing debts and for general corporate purposes. The company aims to retire Rs 632.8 crore of its total debt, according to information made available in the draft prospectus.

Kotak Investment Banking, Citigroup, Morgan Stanley, Axis Capital, Edelweiss and Yes Bank are the lead book running managers for the issue.

Coffee Day Enterprises is the parent company of Coffee Day Group and the company operates the largest chain of coffee stores in India. The company also has presence in real estate sector through a subsidiary, Sical Logistics. It also owns a 16.75% equity holding in information technology company, Mindtree. Shares of Sical Logistics ended down 2.8% at Rs 159.70 per share on the BSE, exchange data showed.

During the calendar 2015, sixteen companies have raised close to Rs 7,650 crore from primary markets so far, data from Prime Database show.