Adani Power Listing |Listing of Adani Power

Adani Power Listing |Listing of Adani Power

A power project development company Adani Power promoted by Adani Enterprises will list its equity shares on the bourses on August 20, 2009. The company has fixed the issue price at Rs 100 per equity share for its initial public offering of 301,652,031 equity shares of Rs 10 each.

RS Iyer of KR Choksey Securities says Adani Power will list around Rs 110-120 and may go upto Rs 130 a share. “It will stay above the issue price throughout the day.” But one will get the stock below Rs 100 in near term.

Manish Bhatt of Prabhudas Lilladher, says Adani Power will see 12-15% premium over issue price on listing, after looking at the subscription of 39 times on the QIBs front. “The stock may see at least 25-30% premium during the day.” He added that one could buy the stock at Rs 80-90, which would be the best price to buy.

Investment Advisor, SP Tulsian said the grey market premium for Adani Power was at Rs 7. It will list around Rs 110. The outlook for the stock will be positive in the near term and it can touch Rs 120-125 in three-month’s time.

Avinash Gorakshkar, Head-Research, Reliance Money, says Adani Power may list around Rs 110-115. “The grey market premium was around Rs 9.” For infrastructure companies, he feels, it is difficult to predict the target price. But he was quick to add that the stock can maintain above its issue price.

For the non-institutional investors, he sees the break even price at about Rs 120 and more. “They will try to cover their interest cost on the first day. The breakeven price varies because the allotment of shares differs from person to person.”

In an interview with CNBC-TV18, Ambareesh Baliga of Karvy Stock Broking said, “Adani would come closer to its issue price. So the investors who are hoping for a killing may not really make it on Adani Power.”

The stock is expected to list on August 20th,2009. We have been hearing a lot about overpricing of the IPO by the Adani’s. Whether the issue was overpriced or not will be finally decided by the markets. The company has not started operations yet and hence doesn’t have any earnings data. At Rs 100 per share the company would quote at a Price to Book Value of 2.8. NTPC, an existing profit making company is currently priced at 2.8 times its Book Value. This shows that Adani Power has been priced aggressively. However, one should remember the fact that Adani has certain impressive operational advantages such as location of projects in areas where peak time shortages is maximum, leverage of presence of Adani group in Coal mining, Shipping as well as power trading.

From a long term prospective the stock looks very promising. However from the current perspective the stock is priced aggressively. The current grey market premium is ruling at Rs. 8-10. The stock is expected to list in the range of Rs 110-115 and may go up or down depending on the buying by the QIB’s to cover for the shortfall in allotment. Investment Guru is of the view that Investors may book profits at a price above Rs 115 and take advantage of listing euphoria. Long term Investors can re-enter the stock at lower levels once the listing sensation is over.

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