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Friday, January 27, 2023

Adani Enterprises FPO: What GMP Says When Issue Opens Friday

Adani FPO Companies: The follow-on public offering (FPO) of Adani Enterprises Ltd will open for subscription on January 27, 2023. The value of FPO $Rs 20,000 crore will remain open for bidding until 31 January 2023. The Adani group company has already set the FPO price band of Adani Enterprises at $3,112 to $3,276 per equity share. The management of this flagship company of the Adani group has already announced that the net proceeds from the follow-on issuance will be used for debt repayment and capital expenditure requirements of the company and its subsidiaries.

Meanwhile, after the bloodbath on Dalal Street in Wednesday’s session and the sharp sell-off in Adani Group shares, the gray market is indicating muted sentiments regarding Adani Enterprises FPO. According to market observers, Adani Enterprises FPO GMP (gray market premium) today is $45, which is $55 below its GMP on Wednesday $100. They said that the drop in gray market sentiment is mainly due to the trend reversal in Dalal Street, as the market failed to break its strong hurdle located at the 18,200 to 18,250 levels.

However, the fact that Hindenburg Research took a short position in Adani group shares further dented gray market sentiment, market watchers said. They said a lot will depend on the type of response this follow-up offer receives. A strong response is expected to change the mood of the gray market as issuance opens on Friday of this week.

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However, stock market experts advised investors to look at the company’s fundamentals rather than the gray market mood. They said that GMP has no connection to the company’s finances as it is completely unregulated and speculative. They told investors to scan the company’s balance sheet instead of checking Adani Enterprises’ GMP FPO, which keeps changing from time to time.

Adani Enterprises FPO Review

Giving the ‘subscribe’ tag to Adani Enterprises FPO, Ashika Research — Equities says: “On the financial performance front, during FY18-21, Adani Enterprises has reported top-line CAGR growth of 26.5 percent. EBITDA margin during the period has stayed at around 5 Average RoE stood at ~5.0%, during FY18-21 Therefore, we recommend our investors to underwrite Adani Enterprise FPO, as it is a group of construction of nations and is venturing into the emerging sector which is green hydrogen which has an immense growth opportunity.”

Adani Enterprises stock price ended at $3,405 each on NSE after the close of trading on Wednesday.

Disclaimer: The opinions and recommendations made above are those of individual analysts or brokerage firms, and not of the Mint. We advise investors to consult certified experts before taking any investment decisions


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