Jul 21, 2009
Adani Power – Will Infrastructure Finance get Public Participation
Adani Power is coming out with the next Public Issue that will be closely watched in two weeks and with 30 crore shares on offer, it could easily mop up 3000 Crores for its 13.5% post IPO stake on offer. For a total projects of 6600 MW in Mundra, Dahej and Tiroda, the company estimates a cost of Rs 29000 Crores or $ 5.8 b which is a little under Reliance’s estimate of $1m per MW. The promoters are doing a lot of jugglery between the projects as they also own Mundra port et al but they do have preliminary PPA arrangements with Haryana ( Mundra Ph IV) , MP (Tiroda) and Mundra Port, Gujarat, Maharashtra (Mundra, Dahej). these are big ticket issues and one mis-step in the market could easily derail the infrastructure engine for 12-18 months
Adani Power has done some private placements in Mar and even in June and most are at par, with some at a premium of Rs 90, which seems to make for a really large shareholder base and may dilute premium for others? Does that mean they anticipate a weak response to the market? Probably, it is just the cost of long term venture equity. Interestingly out of the @180 million shares post issue, 1450 million would have no lock up or lock in ( lock up) period of less than one year. For the Mndra project, Phase I&II was financed by a consortium of Public Sector Banks borught together by ICICI Bank for Rs 3200 Crores ( $640 m)
Foreign portfolio investors have poured in $8.7 billion since April, while speculation is already rife for PSU divestment in Coal India and National Hydro Electric Corp in the Power sector, each easily worth a $1 b for 15-20% stake. Also SBI Infrastructure fund with Macquarie has raised its bucket size to !.5 billion adding another $500m. Adani Power is raising $600m
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Adani Power will likelty list at 700-800 with the first day oversubscription likely 7-8 times and spilling into retail
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