The minimum bid lot has been fixed at 65 equity shares by the company in consultation with the global coordinator and book running lead manager. The issue will close on July 31, 2009.
Experts suggest that one should subscribe to the IPO as it leaves good profits for investors on the table.
Commenting on the same, Investment Advisor, SP Tulsian, said he would subscribe to Adani Power IPO. "If one gets the share at Rs 100, I think this is quite interesting and it should leave good profits for the investor on the table," he added.
KRChoksey recommends investors to 'Subscribe' to the company’s IPO. Based on its calculation, the company’s fair value comes at Rs 104 per share & believes that the downside risk is negligible and one can look into the issue for listing gains.
Nirmal Bang believes that Reliance Power is the best comparable company as both the companies are implementing large power plants and do not have any existing operational revenue generation. It recommends investors to 'Subscribe' to the company.
According to the research firm Sharekhan, the NPV (Net Present Value) works out to Rs 84 per share. Add to this the cash of Rs 12.5-14 per share raised from the public issue, the fair value per share is close to the higher end of the offer price band.
Reliance Money says the company gets a BV of Rs.33.5-36.3 at the price band of Rs.90-100. The stock quotes at P/BV of 2.7x and 2.8x post dilution. Looking at the long term growth prospects, it believes Adani Power Ltd is a good opportunity for investors and recommend 'Subscribe' with a long-term prospective.
Angel Broking believes that the IPO is fairly priced and keep a Neutral view on it. The research firm has valued all upcoming projects of the company individually and arrived at a Fair Value of Rs82/share, while strictly adhering to the Execution timeline given in the RHP.
The issue constitutes 13.84% of the post-issue paid-up equity share capital of the company. The issue includes a reservation of up to 8,000,000 equity shares for eligible employees. The issue less the employee reservation portion comprises a net issue of 293,652,031 equity shares. The net issue will constitute 13.47% of the post-issue paid-up equity share capital of the company.
At least 60% of the net issue will be allocated on a proportionate basis to qualified institutional bidders (QIBs). And 5% of the QIB portion will be available for allocation on a proportionate basis to mutual funds only and the remainder of the QIB portion shall be available for allocation on a proportionate basis to all QIB bidders, including mutual funds, subject to valid bids being received at or above the issue price. The QIB portion includes anchor investor portion as per the SEBI Guidelines. Further, not less than 10% of the net issue will be available for allocation on a proportionate basis to non-institutional bidders and not less than 30% of the net issue will be available for allocation on a proportionate basis to retail individual bidders, subject to valid bids being received at or above the issue price.
The company intends to utilize the net proceeds of the issue to part finance the construction and development of Mundra Phase IV Power project for 1,980 MW and fund equity contribution in its subsidiary, Adani Power Maharashtra Limited, to part finance the construction and development cost of power project for 1,980 MW at Tiroda, Maharashtra.
The equity shares offered through the red herring prospectus dated July 14, 2009, of the company are proposed to be listed on the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited.
The global coordinator and book running lead manager for the issue is DSP Merrill Lynch Limited. Book running lead managers for the issue are Enam Securities Private Limited, IDFC-SSKI Limited, JM Financial Consultants Private Limited, Kotak Mahindra Capital Company Limited, Morgan Stanley India Company Private Limited, ICICI Securities Limited and SBI Capital Markets Limited.
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