MC Inside Edge: Banks take a fancy for Sanstar, AIFs could get more elite, old-school still rules the roost in market

Check the major deals and all the inner goings-on from Dalal Street.

Banks make a beeline for Sanstar

The recently-concluded IPO of Sanstar did see a strong response from investors across categories as the public issue was subscribed nearly 83 times, as per NSE data. While the portion reserved for institutional investors was subscribed a little over 145 times, an interesting aspect was the enthusiasm shown by banking majors -- both domestic and global -- for bidding for the shares of the company that is a major manufacturer of plant-based speciality products and ingredient solutions, catering to the food, animal nutrition and other industrial applications segments. Big banking entities including JP Morgan, Bank of America, Kotak Mahindra Bank, Axis Bank, Citi and HSBC, among others, are believed to have bid for large chunk of shares during the IPO. And, if the listing is anything to go by, then it seems it was a good investment call. The shares are currently trading at around Rs 120 – more than 25 percent higher than its issue price of Rs 95.

Will AIFs become more elite?

Alternative Investment Funds or AIFs have become quite popular investment avenue for the Richie Rich community with the latest Sebi data pegging the number of such funds at more than 1300. There is an elite quotient attached to the AIF arena as the minimum investment ticket size is pegged at Rs 1 crore – double that of PMS in which one can start investing with a minimum of Rs 50 lakh. While it may already be looked upon as an investment vehicle for the ultra-rich, there is a large section of market participants – including the regulator – that believes that it is time to make it more elite by increasing the minimum investment size. The AIF advisory committee appointed by Sebi has, time and again, deliberated on this matter but failed to reach a consensus. Interestingly, committee chair N R Narayana Murthy is believed to be not so keen on increasing the minimum investment ticket size.

Old is still gold on Dalal Street

A few years back when the world was hit by a global pandemic and everything came to a standstill, Indian stock markets saw a sudden flood of new and young investors who were ready to bet on “new-age” companies and sectors. More than four years have passed since then and it seems that the market veterans are having the last laugh. Most of the analysts and wealth advisors are still pitching “old-school” sectors and companies for long-term wealth generation, highlighting the fact that the list of multi-baggers over a 4-5 year period is still dominated by traditional companies. Indeed, as leading names from sectors like manufacturing, energy, metals, power, railways, logistics, auto, and heavy engineering among others have seen their stock prices move up in multiples of hundreds -- thousands in some cases – over the last 4-5 years.