Adani Power IPO comes to the market today!

>> Tuesday, July 28, 2009

The much-awaited big-ticket IPO from the Adani group will open on Tuesday amid high expectations from the group that saw its earlier Adani IPO offering, the Mundra Port & SEZ (MPSEZ) issue, being oversubscribed a record 116 times in November 2007.

Adani Power, which opens its public issue on Tuesday, has completed allocation of shares to anchor investors. It allocated 5.25 crore shares to the domestic and foreign institutional investors for close to Rs 502.14 crore.

Foreign institutional buyers include T Rowe Price, AIC, Ecofin, TPG and Legg Mason. Among domestic institutions, Sundaram Mutual Fund pumped in Rs 81 crore in Adani Power and was allotted shares for Rs 95 each. While TPG and Legg Mason were allotted shares through Credit Swice and CLSA, respectively. T Rowe Price got the highest allocation of Rs 220.10 crore for equity share of Rs 95 each. AIC, Ecofin, TPG and Legg Mason invested Rs 24.20 crore, Rs 24.40, Rs 80 crore and Rs 72.4 crore, respectively.

Adani Power will be the first IPO that will follow the anchor investor norms, made mandatory by Sebi. According to Sebi guidelines, the maximum reservation for anchor investors is 30% of the qualified institutional buyers’ portion. Anchor investors get a definitive allotment with one month’s lock-in period.

Sources said anchor investors sought almost double of the maximum reservation, 30% of the QIB portion. “Adani Group has placed entire value chain of coal linkage, port, generation and transmission in place for Adani Power that will sell about 30% of the generation on merchant basis. It is expected to bring in good returns for investors,” said a market analyst.

Adani Power was to offer 30.17-crore shares with a price band of Rs 90-100 per share. Flagship company and promoter of Adani Power, Adani Enterprise, will dilute 13.84% of its holding in the company.