Aug 21, 2009

Adani Power :: Should you buy the stock now?

Adani Power witnessed a lacklustre listing on the markets yesterday. The stock listed at Rs 108 on the NSE but was quick to slip and even fell below its issue price of Rs 100 during the day. This, inspite of the broader markets being in the green. Most analysts were disappointed as they were expecting it to list at a premium of 10-15%.

Vallabh Bhanshali, Chairman of Enam Securities, which was the lead manager to the issue, said that Adani Power's poor performance could be attributed to two reasons; market volatility and a slew of upcoming IPOs. "It was always difficult to arrive at the right price for an IPO when the market was volatile," he added. However he said both NHPC and Adani Power would make good money for investors.

According to the experts, Adani Power is expected to trade between Rs 79 and Rs 95 per share.

Udayan Mukherjee, Managing Editor, CNBC-TV18 said that the stock's net present value (NPV) would range from Rs 70-90. According to him, its fair value would be between Rs 100 and Rs 120.



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