BackAdani Enterprises FPO: What GMP signals after share price crash
Adani Enterprises share price today is around 15 per cent lower from its FPO price
PremiumAdani Enterprises FPO: Amid bloodbath on Dalal Street and Hindenburg Research report raising concern over debt positions of Adani group companies, the follow-on public offer (FPO) of Adani Enterprises Ltd opened for subscription on Friday. After day one of bidding the follow-on offer has been subscribed just 0.01 times whereas its retail portion got subscribed 0.02 times. Meanwhile, grey market mood is also not encouraging for the company and its promoters.
According to primary market observers, Adani Enterprises FPO grey market premium (GMP) today is zero, even though Adani Enterprises share price today is ₹2,768.50 apiece on NSE, more than 15 per cent lower from Adani Enterprises FPO upper price band of ₹3,276 per equity share.
Adani Enterprises FPO GMP today
Market observers said that Adani Enterprises FPO GMP today is zero, which is ₹45 lower from its Friday GMP of ₹45 per equity share. They said that Adani Enterprises FPO GMP has lost ₹100 in last two days, which is mainly due to the short seller Hindenburg Research report on Adani group raising concern over debt position of the Adani group companies. They said that chances ofrevival in grey market mood now depends on two developments only — either Adani Enterprises share price rebounds on Monday or Adani Enterprises management lowers its FPO price. However, even after lowering of FPO price, revival in Adani Enterprises share price is must.
Observers said that market was expecting bounce back in Adani group stock in later part of Friday session but in vain. Observers went on to add that much will depend on the kind of opening Adani group stocks, especially Adani Enterprises shares get on Monday.
According to investment expert Basant Maheshwari, "In normal circumstances, when a stock falls on a short term trigger like we are witnessing these days in Adani group stocks, they reach out to their institutional investors suggesting them to buy the stock at discounted price as there is nothing wrong with its growth outlook and fundamentals. Based on this theory, market was expecting bounce back in Adani group stocks in later half of Friday session but in vain."
See Basant Maheshwari's tweet below:
"Much depends upon Monday opening as SEBI rules clearly say that one can't decrease FPO price by more than 10 per cent. so, even if the Adani Enterprises FPO price is decreased by 10 per cent, it would fall around ₹2,800 apiece, which is higher than Adani Enterprises share price today. If there is bounce back in Adani Enterprises share price on Monday, then in that case the follow-on issue may attract investors otherwise even decreasing the FPO price won't be a handy instrument for the company promoters," said Avinash Gorakshkar, Head of Research at Profitmart.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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