Street signs: Power of retail money, Tata Tech awaits global index entry

Retail investors flex financial muscle with Rs 1 trillion splash

It is often cited that retail investors have become a robust pillar for the domestic capital markets. This power was evident last week during their participation in the five initial public offerings (IPOs). Industry players stated that close to Rs 1 trillion of retail flows were channelled into the IPOs, with nearly 10 million unique investors participating. “It is a remarkable feat. It underscores the fact that there is a lot of retail money available if there is the right investment opportunity on the table,” said a banker. To put the number into context, net retail inflows into stocks stood at Rs 7,600 crore during the July–September quarter of 2023-24. Additionally, household investments in mutual funds stood at Rs 1.8 trillion during 2022–23. Of course, only a small fraction of the IPO applicants will get an allotment given the oversubscription. The rest of the funds will remain in the bank, scouting for the next big opportunity.

Tata Tech awaits global index entry after blockbuster debut

Tata Technologies (Tata Tech), which recently concluded its blockbuster initial public offering (IPO), may have to wait for at least six months before its stock makes it to any global or local indices. At the IPO price, Tata Group is valued at Rs 20,283 crore. Upon listing, the global engineering services could be valued at Rs 36,500 crore if the 80 per cent grey market premium is anything to go by. Typically, companies of this size get added to indices, but Tata Tech’s low public float could be a deal-breaker. “Tata Tech will have a float of around 10 per cent at the time of listing, and that will increase to close to 30 per cent after the pre-IPO lock-up ends. The company could be added to global indices in May and June, but in local indices with meaningful tracking assets, it will take longer,” said Brian Freitas, an analyst with Periscope Analytics.

Nifty’s surge signals new highs on the horizon

The benchmark S&P BSE Sensex and the National Stock Exchange Nifty have logged a fourth straight week of gains. Last week’s gain was modest at 0.3 per cent as liquidity got diverted towards the primary market. About Rs 2.5 trillion has been deployed in the five initial public offerings (IPOs) that concluded last week. Experts say once the allotment for the IPOs gets done, liquidity will come back into the system, boosting secondary market prospects. “We have been seeing a time-wise correction in the Nifty and eyeing a possible breakout above 19,850 next week, which would help the index inch towards a newer high. On the downside, we expect the 19,350–19,550 zone to offer support if profit-taking deepens,” said Ajit Mishra, senior vice-president of technical research at Religare Broking. The Nifty last closed at 19,795 — less than 400 points, or 2 per cent shy of a new high.