new shares

The issuance for a stock witnessed outsized gains, will test investor appetite, compounded by lower liquidity relative to peers and sparse analyst coverage. Presently, that valuation of Adani Enterprises at which it is being traded is 164 times of its one-year forward earnings

Asia’s richest person Gautam Adani’s flagship firm Adani Enterprises is planning to issue nearly 1.8 billion dollar in new shares, as reported by a media house.

The multi-billionaire business tycoon Gautam Adani’s conglomerate is working with advisers on the follow-on issue and may sell the shares soon in the coming year. The sale may reach nearly 2.4 billion dollar, the report added.

The issuance for a stock witnessed outsized gains, will test investor appetite, compounded by lower liquidity relative to peers and sparse analyst coverage.

Previously, the conglomerate had attributed the small free float to the Adani family holding nearly 75 per cent of Adani Enterprises. Early in this year it said that planning to increase the free float.

The shares in Adani Enterprises have jumped 134 per cent in the year to date, which gave it a market value of around 55.5 billion dollar. India’s NSE Nifty 50 index rose just 5.1 per cent over the same period. It added Adani’s flagship in the gauge during September.

Presently, that valuation of Adani Enterprises at which it is being traded is 164 times of its one-year forward earnings. Nifty, in comparison, is trading at a multiple of about 20 times and Reliance Industries being the largest firm in India by market value is trading at around 21 times, according to the media report.

The details of the fundraise along with the size and timing which may still change and deliberations are ongoing, the report added.

The company will hold board meet on 25 November in order to discuss raising funds, said the company in an exchange filing on 22 November.

Adani’s group planning to raise nearly 10 billion dollar in new debt in the coming year as the conglomerate seeks to refinance its high-cost borrowings and fund projects in the pipeline. The effort may initiate in the ongoing December quarter.

Gautam Adani being the third richest person on planet, has made forays into a diverse array of businesses with dealmaking recently. Adani spearheaded a 10.5 billion-dollar acquisition of Holcim’s local cement assets, making it India’s second biggest deal of the year.

Also, the firm is making a bid to take over New Delhi Television (NDTV), with the disclosure of an indirect 29.2 per cent stake in the broadcaster. This triggered an open offer that launched on 22 November and will run until 5 December.