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Indian Indices Trade Marginally Higher; Realty Stocks Witness Buying
Fri, 16 Jun 11:30 am

Stock markets in India are presently trading on a flat note. Sectoral indices are trading on a mixed note with stocks in the realty sector and FMCG sector witnessing maximum buying interest. IT stocks and healthcare stocks are trading in the red.

The BSE Sensex is trading up 7 points (up 0.1%) and the NSE Nifty is trading up 8 points (up 0.1%). The BSE Mid Cap index is trading up by 0.3%, while the BSE Small Cap index is trading up by 0.4%. The rupee is trading at 64.64 to the US$.

In the news from IPO markets, the initial public offer of Tejas Networks got subscribed by 43% so far.

Tejas Networks is an optical and data networking products firm with customers spread over 60 nations. The comany designs, develops and sells software enabled networking equipment products to telecommunications service providers, internet service providers, utility companies, defence companies and government entities.

The IPO of the company closes today. The price band for the IPO has been set between Rs 250 and Rs 257 per share and the company plans to issue fresh equity shares worth Rs 4.5 billion and an offer for sale of up to 12,711,605 equity shares.

Market participants are also tracking the IPO of Eris Lifesciences which is going to hit the primary markets today.

To know our views on the above two IPOs, you can visit our IPO page.

IPOs have caught the frenzy of investors. Looking at the performance of IPOs listed in 2017, one could see the reason why. Almost 75% of the IPOs listed in 2017 till date have given positive returns. Although we are nowhere near the euphoria of 2007, we are slowly but surely getting there.

However, according to Hindu Business Line, till June 2016, only 40% of the IPOs launched between 2004 and 2011 were trading above their issue price, as can be seen from the chart below.

Are IPOs a Sure Shot Way to Make Money?

We, at Equitymaster, have always recommended IPOs cautiously. Here's Rahul Shah, co-head of research at Equitymaster, explaining our rationale behind the approach:

  • 'We know what a dirty game the IPO business is. We've seen it over and over again: It's a game where the odds are stacked against investors. So for us, the equation is simple. We'd rather face criticism in the short run than see our subscribers lose money over the longer term. We weren't afraid to do this during the hot IPO days of 2007, and we're not afraid to do it today.'

The Bottomline: You need to evaluate each IPO on its merits by considering its fundamentals, and most importantly, the valuations. And this is particularly important when the hype surrounding IPOs is at its peak.

If you're new to the 'lovely' world of IPOs, we have something for you...

Our new and completely free report - How to Get Rich with IPOs - will tell you how to find those money spinning IPOs and avoid the disasters in the coming year and beyond.

In the news from global financial markets, the Bank of Japan (BoJ) kept its monetary policy steady on Friday. While doing so, it offered a more upbeat view on private consumption and overseas economies. This signaled the BoJ's confidence that the recovery was gaining momentum.

One shall note that Japan's economy gained most of the stimulus by the fall in the yen after the election of Donald Trump as US President.

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While the above developments look good, there remain many issues that can hamper Japan's economic growth. The economy is flooded with excessive money printing...too much debt...too much government intervention...too much stock market manipulation, etc.

Also, the above developments by the BOJ are in continuation with the easy money policies that central banks are adopting around the world.

With the changes at central banks in 2016, it seems that the end of easy money is near. And it can very well affect the emerging stock markets across the globe, including India. However, a crash can be an ideal time to bet on solid Indian companies that are well-shielded from adverse developments in global markets. As these companies can turn into bargain buying opportunities.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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1 Responses to "Indian Indices Trade Marginally Higher; Realty Stocks Witness Buying"

Neerja vahal

Jun 17, 2017

Sounds realistic

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Equitymaster requests your view! Post a comment on "Indian Indices Trade Marginally Higher; Realty Stocks Witness Buying". Click here!

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Jul 27, 2017 (Close)

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