Sumeet Bagadia, the executive director at Choice Broking says the firm had assigned a 'subscribe' rating to Tega Industries owing to its niche business presence in mining consumable equipment and expects the company to list at a premium on Monday.
Among the IPOs that will be opened for subscription next week, "we are positive on Metro Brands and Medplus Health Services IPO and are advising clients to subscribe to it," said Bagadia in interaction with Moneycontrol's Sunil Shankar Matkar.
Bagadia has more than 10 years of experience in Indian capital markets.
Edited excerpts -
Q: Do you think the momentum is really strong now after the recent correction? Can Nifty50 cross the 18,000-mark in the coming week and why? Fundamentally, what is the best support level for the Nifty if sharp correction begins again?
After a recent correction from 17,613.10 to 16,782.40 levels, the Nifty index has recovered sharply, ending the week at 17,511.30 levels. However, there is an immediate hurdle at around 17,600. Above it, we will see the fresh buying in the index for the immediate target of 18,000/18,300 levels.
Technically, the Nifty index has taken support at Lower Bollinger Band and settled above the 100-day Moving Average, which suggests a further upward move in the coming week. The weekly prices have also settled above 21-EMA (exponential moving average), which suggests a bullish strength in the index. A daily momentum indicator MACD & Stochastic is trading with positive crossovers which points-out upside momentum in the coming sessions.
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Q: Economic growth pace has picked up in the last several months now, which is one of the key supportive factors for the market. What could moderate the economic growth pace in 2022?
India's GDP clocked a healthy growth rate of 8.4 percent in Q2FY22, primarily on the back of a low base, an uptick in agriculture, and higher government public spending. GDP growth was higher than the RBI's estimate of 7.9 percent. The economic activity was also supported by high vaccination and decline in COVID cases which led to improving traction in high contact activities such as hotels and restaurants. Key risks to economic growth are the emergence of the new COVID variant Omicron, lower investment and easing of demand post-festival season.
Q: Do you think India's price-to-earnings premium to global equities is already high and hence further P/E expansion may be unlikely?
With the risk of the US Fed announcement of accelerating of bond-buying pace, likely reduction of liquidity in the global market, and the emergence of new COVID variant Omicron, expansion in market P/E is unlikely in the near term.
Q: Four IPOs - Metro Brands, Medplus Health, Data Patterns, and HP Adhesives - will be opened for subscription next week. What would be your favourite IPO (pick) amongst them and why?
We are positive on Metro Brands and Medplus Health Services IPO and are advising clients to subscribe to the issue. While it is too early to comment on Data Patterns and HP Adhesives as both IPOs are under study.
Q: Tega Industries, Anand Rathi Wealth, and RateGain Travel Technologies will make their debut on the bourses next week. What could be listing premiums for them and why? What should investors do with these stocks after listing?
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We had assigned subscribe rating to Tega Industries because of its niche business presence in mining consumable equipment. The company demonstrated strong financial performance in the reported fiscals with healthy margin and return ratios. Tega Industries IPO is expected to list on premium. Meanwhile, we have a neutral view on Anand Rathi Wealth and RateGain Travel Technologies.
Q: What are your broad expectations for the November CPI inflation that will be announced on Monday?
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Elevated core inflation and high fuel prices will continue to put upward pressure on headline inflation numbers. Meanwhile, Inflation is likely to remain within RBI's target band on the back of contained food inflation.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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