What Rs 20,000 cr Adani Enterprises FPO says about stock market outlook? Basant Maheshwari decodes

By admin On Jan 19, 2023

Market veteran Basant Maheshwari says the Rs 20,000 crore mega follow-on public offer (FPO) by Adani Enterprises is not a sign of the stock market making a top, but reflects the strong undertone in the market. In a video uploaded on his YouTube channel Basant Maheshwari – The Equity Desk on January 17, Maheshwari said he sees a bullish market momentum till the Adani FPO gets concluded. The video has been viewed by 21,000 times so far.

Maheshwari, who has three decades of experience in market, said fears generally grip investors when a big initial public offer or FPO comes to the market. Investors wonder whether the big offering could a sign of market peaking like the case after 2008’s Reliance Power or 1994’s Morgan Stanley, he noted.

Maheshwari gave a few other examples such as HCL Tech’s IPO amid dot-com bubble burst, the market topping after 2020’s SBI Card and also the peaking of market after 2021’s three IPOs Nykaa, Zomato and Paytm to reflect investor concerns.

Maheshwari was, however, quick to note that most of the offers he talked about came after a sharp market rally, be it Reliance Power, Zomato, SBI Card or Nykaa. Adani Enterprises’ FPO, on the other hand, has come after a long gap, Maheshwari said.

“If an offering comes after a long gap, if does not mean the market is making a top but the fact that the market undertone is bullish and that is why the FPO is being brought to the market,” Maheshwari said.

Maheshwari said it is up to retail investors whether they would subscribe to the issue, but he sees good foreign investor

response to the issue. Maheshwari said he would have preferred had the FPO been launched after Budget.

“Nifty should do well ahead of Budget and the FPO. There are no negative news expected before the Budget. Indications are positive. We should see Nifty trading positive in the next 12-15 days. Whenever a FPO comes, market stays positive at least till the FPO ends,” he said.

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Also read: Adani Enterprises’ shares crack 4% ahead of FPO; should you lap-up the stock?