Adani Power Ltd IPO opens today, Views and Analysis

The IPO of Adani Power, promoted by the owners of Mundra Port & SEZ, opens today on June 28 and plans to mop up to Rs 3,016 crore from the primary market. This is the second biggest in country's history after Reliance Power.

Basic Details of the IPO:

  • Books Open 28th July 2009, Tuesday
  • Books Close 31st July 2009, Friday
  • Price Band Rs.90 - Rs.100.
  • Lot Size 65 x multiples of 65 Equity Shares
  • Issue Size Primary offering of 301,652,031Equity shares (~13.8% of post issue capital)
  • Employee Reservation 8,000,000 Equity Shares
  • Net Issue Size 293,652,031 Equity Shares (~13.5% of post issue capital)
  • QIB Book 60% of the Net issue size - at least 176,191,219 shares
  • Retail Book 30% of Net issue size - not less than 88,095,609 shares
  • HNI Book 10% of Net issue size - not less than 29,365,203 shares
  • Book Running lead managers DSP ML, JM Financial, Enam, IDFC SSKI, Kotak, Morgan Stanley, I-Sec, SBI Caps

The rough date of listing is around August 20th 2009. As I write this blog article the news is out that the offer is already oversubscribed 3.5 times.



The valuation for this IPO doesn’t looks cheap compared to its peers like reliance power. In terms of enterprise value per megawatt of power, Adani power seems to be cheaper than reliance power. However on the project financing front, the company has over-leveraged itself with a Debt-to-Equity ratio of 80%.



The company has decided to use only Chinese equipment at all its plants, which have been dogged by a host of technical issues when used for operating Indian plants in the past. The company also lacks any significant operating history to execute projects of such mammoth scale.

Overall the issue seems to be just neutral but yeah it can be used as a listing strategy, to exit on listing.


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