Adani IPO closes; likely to list around Aug 20

Adani Power IPO (initial public offering witnessed huge investors' interest and was subscribed 21.64 times. The issue received bids for more than 538 crore shares as against the issue size of 30,16,52,031 shares, as per the data available on the NSE website.

Qualified institutional investors have given strong response to the issue and their reserved portion was subscribed 39.5 times. Non-institutional and retail investors' portion subscribed 8.62 times and 2.97 times, respectively.

Amit Desai, Director of Adani Power said almost all bids were at upper end of the band, Rs 100 a share. The company, he said, was likely to list its shares around August 20, 2009

The price band was fixed between Rs 90 and Rs 100 per equity share. The net issue would constitute 13.47% of the post-issue paid-up equity share capital of the company.

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.

Here is a verbatim transcript of the exclusive interview with Ameet Desai on CNBC-TV18. Also watch the accompanying video.

Q: Last we checked it was 14 times, what are your numbers suggesting?

A: As of 3 pm the overall number has gone close to 19 times – 18.85 times.

Q: How much of that is QIP? How much HNI and how much retail?

A: The QIP portion is oversubscribed by about 36 times. This is after the anchor investment allotment which has been done and HNI has gone past 4.5 times and retail is inching towards 2 times but of course I understand more bids will be uploaded between now and 5 pm for QIB and HNI and bankers are likely to seek little longer time for the retail bids update later in the evening.

Q: Where have most of the hits come at – the upper end of the band?

A: Almost 99% of the bids have come at Rs 100.

Q: So it seems likely that that is where you would choose to price the issue or because of this hefty subscription you will think of redoing it a little bit?

A: The bids have come at Rs 100 for most part of the issue and we would obviously now start discussing this issue with the investment banks but quite highly likely that we will go by where the bids flow has been.

Q: You placed two anchor investors at Rs 95, of course with the understanding that finally they would buy at the issue price but do you think it is likely that you may consider doing it at Rs 95 for goodwill – give Rs 5 to the investor or do you think you will make the anchor investors pay Rs 100?

A: All anchor investors have sent a separate communiqué to the banks through which they came in that they would fully desire to participate at the rate at which the issue gets done. As such the regulation is that if we price the issue at Rs 100 – they pay the difference. So the fact that they have given the confirmation of Rs 100, they are not really looking at Rs 95.

Q: While you won’t get into specifics, just give a sense of the kind of names that have come into this QIB slot?

A: Very encouraging. Obviously the names would come out later but we have got demand from some of the highly respected long only investors from different parts of the world – Asia, Europe, US and domestic. So it is an extremely healthy combination in the book that we have been able to get as demand which is actually very gratifying.

Q: Does August 20 remain the proposed listing date if all goes well?

A: Absolutely. We are working towards that. The registrars and banks have been gearing up on that ever since the issue opened. So we surely are looking forward to list this scrip on August 20.

Q: How will you choose the institutions to which you will allot because there has been some talk that may be some of the institutions have got in for that flipping game – to buy now and to sell on listing day, can make a quick 10-25%? In that, would you be stringent on who you allot the stock to, so that these are slightly longer-term investors and not out for a quick buck?

A: This is not a discretionary allotment. This is a book built and at the price at which we priced the issue at that level whatever are the bids they get allotted in proportion of their application. So this becomes quite a non discretionary and very objective process.

Q: While you did indicate in your interview with Udayan a couple of days back that you’re not looking at any other fund raising mechanism, because of the kind of oversubscription you’ve got, would you look at tapping the market again to raise some money via QIP once you’re listed?

A: For Adani Power no. We do not need equity is what we have stated earlier and I think our objective was to raise this money for largely completing the equity funding of 6,600 megawatts. Balance money beyond what we need for 6,600 – a small proportion from IPO will go towards kick starting 3,300 megawatts and then we will finish that 3,300 megawatts from internal accruals. So a short answer to your question is no, we won’t come back to the market for Adani Power’s equity requirements.

Source: Moneycontrol.com

Subscribe to Adani Power IPO: Nirmal Bang

Nirmal Bang has come out with its research report on Adani Power IPO. Adani Power IPO will open for subscription with an initial public offering of 301,652,031 equity shares of Rs 10 each for cash at a price to be decided through a 100% book-building process on July 28, 2009 and will close on July 31, 2009. The Adani Power IPO price band is fixed at Rs 90-100 per share.

The research firm has recommended investors to subscribe to the issue.

Nirmal Bang's report:
Adani Power Ltd. (APL) is a power project development company, which is developing, and will operate and maintain, power projects in India. The company has four thermal power projects under various stages of development, with a combined installed capacity of 6,600 MW.

We believe 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. We tried to compare both the company on the basis of Enterprise Value(EV) per MW, Subscribe.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol.com

Adani Power IPO to hit markets on 20th July

SEBI has given green signal to Adani Power Limited’s initial public offer (IPO). The company is expected to hit the capital market on 20th July. APL, which had postponed its IPO due to bad market condition in September 2008, is now planning to raise over Rs 3,000 crore for financing its 6600 MW power plants at Mundra and Tiroda in Gujarat and Maharashtra respectively.

As per the plan, Adani Power Limited is offering 33.77 crore equity shares through the IPO. The company is expected to charge a premium of around Rs 120 per share of Rs 10, sources familiar with the situation said.

At present, the promoters hold 87 per cent equity in the company. Post IPO, the promoters will have around 73.5 per cent holding as it is raising an additional 15 per cent equity through IPO. It may be pointed out that a UK based private equity fund has already picked up 8 per cent equity in the company.

Source: greymarket.in

Adani Power IPO Likely to Open in July 2009

Adani Power's initial public offer (IPO) is likely to open in July, 2009, said the Group Executive. "The IPO is likely at about Rs 120 per share," reports CNBC-TV18.

Adani Power, a part of the the Adani Group, filed draft red herring prospectus (DRHP) with market regulator SEBI for IPO of 33.7 crore equity shares. The issue includes a reservation of up to 8,000,000 shares. Equity shares outstanding post issue would be 2,18,00,35,200.

It is a power project development company, which is developing, and will operate and maintain, power projects in India. It has four thermal power projects under various stages of development, with a combined installed capacity of 6,600 MW. In addition, it is also planning to develop two power projects with a combined installed capacity of 3,300 MW.

The company is going to utilize the issue proceeds - to part finance the construction and development of Mundra Phase IV Power Project, for 1,980 MW; funding equity contribution in subsidiary Adani Power Maharashtra Limited and to part finance the construction and development cost of power project for 1,980 MW at Tiroda, Maharashtra; and General corporate purposes.

The company has made preferential allotment to Ventura Power at Rs 70 a share. This placement price values the company at Rs 15,260 crore post IPO.

Adani Enterprise, promoter will hold 70.25% stake in the company post IPO.

Global coordinator and book running lead manager to the issue is DSP Merrill Lynch Limited and Registrar to the issue is Karvy Computershare Private Limited.

Source: Moneycontrol.com

General insurers may be allowed to tap capital market

The Initial Public Offering (IPO) of Bharat Sanchar Nigam Ltd (BSNL) is expected to take precedence over the capital raising proposals of the public sector general insurance companies.

Sources said that the Government was not opposed to the capital raising plans of the four general insurance companies — New India Assurance Company Ltd, National Insurance Company Ltd, Oriental Insurance Company Ltd and United India Insurance Company Ltd.

The plans are now awaiting amendments to the General Insurance Business (Nationalisation) Act of 1972 and the Insurance Act of 1938.

But clearance for the capital raising efforts is likely only after completion of the Rs 42,000-crore BSNL’s mega IPO. The sources said that the Government’s efforts were to push through with the 10 per cent divestment in BSNL. The BSNL focus was largely driven by the ticket size, the sources said.

The large ticket size would help the Government raise large resources and partly help in complying with the fiscal deficit targets for the current year, estimated at 2.5 per cent of the Gross Domestic Product.

Of smaller size
Raising of resources by general insurers through a combination of capital restructuring and IPOs would, however, be of far smaller magnitude.

The smaller ticket size notwithstanding, the sources said, indications are that the insurers would be permitted to access the domestic capital markets this financial year itself. This was particularly in view of general insurers’ urgency in capital requirements for growing their business.

Besides, general insurers also have pressed the need to reduce reliance on cross border risk capacities for conforming to regulatory solvency margins.

Solvency margin
At present, the regulator’s prescribed solvency margin is 150 per cent. Solvency margin implies the excess of capital and value of assets over the insured liabilities. At present, the PSU general insurers have solvency ratios in excess of two times over their insured liabilities.

However, this was largely in view of the low insurance penetration. The general insurance market is currently about Rs 35,000 crore or about 0.65 per cent of the Gross Domestic Product.

The Asian average is about 3 per cent of the GDP. Stepping it up to Asian levels, the sources said, would require capital infusion.

The combined net worth (paid-up equity + general reserves) of the four PSU insurers is currently about Rs 13,000 crore.

Besides, the sources said, valuation exercises for the four companies are yet to begin. New India Assurance, Oriental Insurance and United India Insurance have hired the Boston Consulting Group as external consultants. National Insurance has appointed PwC as its consultant.

The sources said that the consultants would not be valuing the companies.

But the process for beginning a valuation would be in place even as the amendments to the statutes are completed over the next few months, the sources added, reports The Hindu Business Line.

Source: Moneycontrol.com

Adani Group begins groundwork for Adani Power's IPO

Adani Group is believed to have started the groundwork for the initial public offering (IPO) of Adani Power (APL). The company is in talks with merchant bankers.

The weak market condition has come in the way of the company in taking a final call on the IPO. Industry sources said that the company has already initiated discussion with a number of merchant bankers, including SBI Caps, for issue advisory.

Sources said that the company is currently waiting for the market conditions to improve before taking a final view on the issue size and timing. “We are not expecting the issue to hit the capital markets before September-October,” a merchant banking source said.

Sources in APL though admitted that there are some early considerations about the IPO, stressed that the group was yet to take a call on the issue.

It may be mentioned that 3i India Infrastructure Ltd, London-based private equity firm 3i Group’s investment vehicle, has already invested Rs 900 crore (USD 227 million) to acquire a minority stake in Adani Power Ltd.

According to sources, Adani Power Maharashtra Pvt Ltd – a wholly owned subsidiary of Adani Power Ltd – may announce the financial closure of the proposed 1,320 MW (2X 660 MW) coal-based thermal power plant at Tirora by May-June. Tirora is in Gondia district of Maharashtra.

According to sources, Adanis are in an advanced stage of tying up the loan finances of the project. “The lenders to the Tirora project are already identified. We are expecting Adani Power to announce the financial closure of the project latest by June,” a banking industry source said.

Meanwhile, Adani Power is making steady progress in implementing the 4X 330 MW (1,320 MW) thermal power project at Mundra. The project will be expanded by another 1,320 MW in the second phase.

“Implementing of the phase-I is on schedule. The first 330 MW unit is expected to be commissioned in the second quarter of 2008-09. The rest three units are expected to be commissioned in a phase-wise manner in a gap of every three to four months from the commissioning of the first unit,” a source said, reports The Hindu Business Line.

Source: Moneycontrol.com