Adani Enterprises’ Rs 20,0000 crore follow-on public offering (FPO) hit the Dalal Street on Friday, January 27. The issue can be subscribed till Tuesday, January 31 and investors can bid for the shares in the range of Rs 3,112-3,276 apiece with a lot size of four equity shares.
Analysts have mixed views on the issue. Few have given a ‘subscribe’ rating to the issue citing robust growth potential, superior segments of operations, managerial efficiencies. However, others have flagged concerns over valuations but remain tight-lipped.
Adani Enterprises is issuing fresh 67,38,475 equity shares with a face value of Re 1 each. The shares will be listed on February 8 at the exchanges. Each lot of Adani Enterprises’ FPO will cost Rs 13,104 to the investors at the upper price band.
Adani Enterprises will utilise the net proceeds from the issue towards funding capital expenditure requirements of some of the subsidiaries including green hydrogen ecosystem; improvement of airport facilities and construction of a greenfield expressway. Remaining funds will be utilised towards prepayment/repayment of loans and general corporate purposes.
Adani Enterprises
Adani Enterprises’ Rs 20,000 crore follow-on public offering (FPO) hit Dalal Street on Friday. Investors can bid for the issue, which is open till Tuesday, January 31, in the range of Rs 3,112-3,276 price band, with a lot size of four equity shares.
The quota reserved for retail bidders is fixed at 35 per cent; they will get a discount of Rs 64 per share on the issue price. The portion reserved for qualified institutional bidders was fixed at 50 per cent, while for non-institutional investors (NIIs) at 15 per cent.
The shares will be listed on February 8 on the stock exchanges.
Adani Enterprises has already raised nearly Rs 6,000 crore from anchor investors ahead of the FPO. They included Abu Dhabi Investment Authority (ADIA), Maybank Asia, Goldman Sachs, Nomura Financial, Societe Generale, Jupiter, BNP Paribas, Al Mehwar, Citigroup, and Morgan Stanley.
Here’s what a host of brokerage firms have said on Adani Enterprises’ FPO:
Ashika Research: Subscribe
Ashika said Adani Enterprises will continue to develop all the business segments and will create long-term wealth for its investors. On the financial performance front, over FY18-21, it has reported a 26.5 per cent CAGR growth in top line, it said.
“EBITDA margin during the period has maintained at 5 per cent and average RoE stood at 5 per cent, over FY18-21. Thus, we recommend our investors to Subscribe to the Adani Enterprise FPO as it is a nation-building group and it is foraying into sunrise sector that is green hydrogen which has immense growth opportunity,” it said.
Nirmal Bang: Neutral
Adani Enterprises’ leap into futuristic technologies like green hydrogen with heavy investments can propel the company into a new league or it could bleed the financials if the market dynamics shifts in favor of other alternate fuels, Nirmal Bang said.
“Its business model involves high risk with uncertain business outcomes and thus we have a ‘Neutral’ rating on the issue,” said the domestic brokerage said.
Ventura Securities: Subscribe
Ventura Securities has a ‘subscribe’ rating on the FPO, with its unchanged target price of Rs 5,999 for the stock in the next 24 months “ given the substantial business developments that have taken place.” It is positive on the company’s new initiatives and capital expenditure.
Sushil Finance: Neutral
Adani Enterprise has a diversified business, including gas and oil exploration, coal and iron ore mining, and agro products. Revenue from operations has grown at CAGR of 16.9 per cent from Rs 43,402.56 crore in FY20 to Rs 69,420.18 crore in FY22, said Sushil Finance.
“The stock has surged around 100 per cent in last one year horizon. Valuation does not seem attractive at this point. Issue Price is at just 7-10 per cent discount. We have a ‘neutral’ view for the issue,” it said.
Asit C Mehta Investment Intermediates: Subscribe for long term
Adani Enterprises, with its established business relations with coal suppliers of Indonesia, Australia and South Africa, has evolved as India’s largest importer of thermal coal catering to the requirement of both private and public sector undertaking (PSU) clients, said Asit C Mehta Investment Intermediates.
“The company has businesses in 4 core sectors – energy and utility, transportation and logistics, consumer, and primary industry. AEL represents an effective complement of established and developing businesses which address the needs of India,” said Asit C Mehta Investment Intermediates.
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