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Adani Enterprises, the holding company of the Adani group, is set to restructure the shareholding of group companies to offer its shareholders stakes in its listed power and port subsidiaries. The company’s board is meeting on Friday to decide on the restructuring proposal.
According to a banker, Adani Enterprises shareholders may get 10 Adani Port shares for every seven shares held. Similarly, Adani Enterprises shareholders may get 20 shares in Adani Power for every 11 shares held in Adani Enterprises. The group has already started restructuring by bringing transmission companies under Adani Transmission.
After the restructuring, the Adani family, which owns 75 per cent of Adani Enterprises, will directly hold shares in the power and port businesses. Holding the shares via Adani Enterprises attracts a holding company discount. Adani Enterprises holds 75 per cent stake in both the power and port companies.
When contacted, an Adani spokesperson said: “As a group we continuously evaluate different alternatives for value creation and value maximisation. However, as a policy, we cannot comment on market speculation in such matters.”
Bankers said the restructuring would help group companies, especially Adani Power, to raise loans on attractive terms. Also, Adani Enterprises’ stakes will fall to the mid-50 per cents in both the power and port subsidiaries, increasing liquidity in the stocks.
On Thursday, shares of Adani Enterprises rallied 4.83 per cent to close at Rs 582 on heavy volumes on the bourses. The stock hit a high of Rs 596, its highest level in 40 months during intra-day trade on the BSE. Earlier, on September 22, 2011, it touched a high of Rs 610 in intra-day trade.
Among other group stocks, Adani Power surged 3.51 per cent to close at Rs 51.55. Adani Port and Special Economic Zone was up 1 per cent to close at Rs 343 after hitting a high of Rs 349 during intra-day trade.
Since January 16, the Adani Enterprises stock has outperformed the market by surging 17 per cent from Rs 500. This was after its board approved divestment of its stake in Maharashtra Eastern Grid Power Transmission Company to subsidiary Adani Transmission. The benchmark Sensex gained 5 per cent during the same period.
Since the Narendra Modi government came to power, the Adani group is making headlines with takeover announcements and new projects. The group took over the Dhamra port from Larsen & Toubro and the Tatas last May for Rs 5,500 crore.
While the port business is doing well, the power business is lagging although in recent months Adani Power has been buying projects across India. Adani Power has announced it is acquiring the 600 Mw Korba plant from Avantha Power and Infrastructure for more than Rs 4,200 crore, which according to analysts, is more expensive than the Rs 6,000 crore offered to the Lanco group for the 1,200 Mw, operational, imported-coal-based power project at Udupi, which has a cost-plus sale arrangement for its entire capacity.
In contrast, Korba is committed to sell 5 per cent of power at energy cost and 30 per cent under a cost-plus arrangement to the home state. Sale arrangements for its balance 65 per cent capacity remain unclear, say analysts with Kotak Institutional Equities. The Lanco deal is under dispute and is pending with Delhi High Court.
Adani Power is also considering selling its 90 per cent ownership in Adani Transmission to Adani Enterprises for Rs 300 crore.
