NEW DELHI: , which was the best Nifty performer in 2022 by more than doubling investor money, is now the worst-performing stock in the top 50 batch by losing around 17% in the last one month. Thursday’s 4% dip comes after the conglomerate announced the dates and price band of its follow-on public offer (FPO).
The Rs 20,000 crore FPO, which will run from January 27-31, carries a price band of Rs 3,112 to Rs 3,276 apiece which is at a discount to today’s low of Rs 3,446. Retail investors would get a discount of Rs 64 per equity share on the price band.
Investors can bid for a minimum lot of four shares and in multiples of four thereafter. While bidding, investors would have to pay 50% of the offer price and the rest later on in one or more tranches.
“Going by the past performance of the stock and growth outlook of the company, high-risk investors can subscribe to the FPO. They have kept the valuation attractive. It can be a calculated bet for investors,” advised Kranthi Bathini of WealthMills Securities.
The FPO, which will help the conglomerate fund capital expenditure requirements of subsidiaries in green hydrogen, airport facilities and greenfield expressway, will lead to the promoter’s shareholding going down by around 3.5% and increase the free float of the multibagger stock.
“This Rs 20,000 crore FPO is a measly sum of money for the gigantic investment aspirations that the company has and in consideration of the $50 billion capex that the company will be infusing in the hydrogen vertical, it is absolutely minuscule,” said Vinit Bolinjkar of
Securities when asked whether it is too big a dilution for billionaire Gautam Adani’s flagship company.
The brokerage has a two-year price target of Rs 5,999 on the stock. “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 Rs 1,10,822 crore/ Rs 25,373 crore/ Rs 9,220 crore respectively,” Ventura said.From a retail investor’s perspective, Girish Sodani, Head of Equity Market at , said the FPO is a good opportunity to buy stocks at a discounted valuation since the stock has done remarkably well in the past and the company is entering into new businesses and expanding them at a rapid pace.
Stoxbox’s Manish Chowdhury is, however, skeptical. He said investors with a low-to-moderate risk appetite should look for better opportunities in the market. “With the stock having run up a lot in the last one year, we feel that the risk-reward and valuations are not very attractive at this point in time (trading upwards of 300x P/E),” he said.
“Also, considering the retail discount and assuming that shares are allotted at the upper price band, there is not much left on the table for investors. Further, we believe that weak global cues are likely to sour market mood going forward,” he said.
Out of the Rs 20,000 crore proceeds of the FPO, Rs 4,165 crore will go towards repayment of debt taken by its airports, road and solar project subsidiaries.
Adani Enterprises shares have surged 88% in the last one year and in the last five-year period, the multibagger stock is up over 1,600%.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)