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    Adani FPO open from Friday: Dates, price band, review, other details in 10 points

    Synopsis

    The basis of allotment of FPO would be finalised by 3 February and shares would be credited to successful applicants' demat accounts by 7 February. The new equity shares would be available for trading the next day on 8 February.

    Adani FPO open from Friday: Dates, price band, review, other details in 10 pointsAgencies
    NEW DELHI: To fund his ambitious capex plans and repay a part of the debt pile, billionaire Gautam Adani's flagship company Adani Enterprises is launching its follow-on public offering or FPO from this Friday. At Rs 20,000 crore, Adani Enterprises FPO would be the largest ever in the history of India.

    With the FPO price band of Rs 3,112 – 3,276 comfortably below the multibagger Nifty stock's current market price (Rs 3442.75 on Tuesday's close), Adani bulls are spotting an opportunity in the low free float counter.

    Having given a gravity-defying return of over 1,600% in the last 5 years, the Adani stock has doubled in the last one year period and entered the exclusive Nifty50 club of stocks on September 30 last year.

    Here are 10 things you need to know about Adani Enterprises FPO:

    1) The FPO, which opens for subscription from January 27 and ends on January 31, is a fresh issue of 61,474,751 equity shares on a partly paid basis.

    2) Shares would be alloted through a 100% book building process with a price band of Rs 3,112 – 3,276. Investors have to bid in multiples of 4 shares.

    3) Investors applying for the FPO will have to pay 50% money upfront while the rest would have to be paid in subsequent tranches. Retail shareholders will enjoy 35% reservation and a discount of Rs 64 per share. After deducting the retail discount, the net bidding price for small individual investors would be Rs 1,574 with the minimum bid amount (for 4 shares) being Rs 6,296.

    4) Half of the FPO is reserved for qualified institutional buyers (QIP) including anchor investors. HNIs, on the other hand, have a reservation of 15%. A small reservation of Rs 50 crore worth of shares have been kept for company employees.

    5) The basis of allotment of FPO would be finalised by 3 February and shares would be credited to successful applicants' demat accounts by 7 February. The new equity shares would be available for trading the next day on 8 February.

    6) Adani Enterprises said it is raising funds to meet capital expenditure requirements (Rs 10,869 crore) for projects in the green hydrogen ecosystem, improvement works of certain existing airport facilities and construction of greenfield expressway. The remaining amount would be used to repay debt for Adani Airport Holdings, Adani Road Transport, and Mundra Solar and for general corporate purposes.

    7) The stock, despite its sky-rocketing journey, finds no coverage from major brokerages. Ahead of the FPO, Ventura Securities brought out a note saying Adani Enterprises shares can rally up to Rs 5,999 in 24 months. "Over the period of FY22-25E, we are expecting AEL’s revenue/ EBITDA/ net profit to grow at a CAGR of 16.9%/ 89.8%/ 128.1% to INR 1,10,822 cr/ INR 25,373 cr/ INR 9,220 cr respectively," the brokerage said.

    8) Ashika Stock Broking has issued a subscribe rating note on the FPO while praising Adani's foray into the sunrise sector of green hydrogen which has immense growth opportunity.

    9) Adani Enterprises FPO is the largest in India, bigger than YES Bank's Rs 15,000 crore FPO brought out in 2020. Other big FPOs in the past include those of ICICI Bank (Rs 10,044 crore in 2007) and Power Grid's two FPOs in 2010 and 2013 (Rs 3,721.17 and Rs 5,321.31 crore).

    10) FPOs are different from offer for sale (OFS) as the former involves fresh issue of shares while the latter is used by the promoter to offload stake.

    (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)



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