Aug 21, 2009

NHPC IPO - Adani Power Listing Impact?

Adani Power listed on the stock exchanges yesterday, the 20th August, 2009 but met with a lukewarm response. Experts say that the next power company queued up for listing, government-owned NHPC, will see a definite impact, especially on its grey market premium.

Even as the two companies were fundamentally different, they would prefer to buy NTPC, which was at lower levels. NHPC's grey market premium, which was trading close to Rs 6-7 yesterday, dropped to Rs 5 immediately after Adani Power's listing.

However, NHPC has an expertise over the hyrdo power sector, so there is a growth factor that gives a terminal value to all these government utilities hopefully the NHPC IPO will be far better than this one Adani Power.

The dealmaker for both IPOs, Vallabh Bhanshali of Enam Securities, however is optimistic. "Both of them will eventually make a lot of value for investors", he said. "People like Adani, who have come to the market again and again and the government who have probably a long pipeline of issues are very conscious that they have to leave value for investors. Yes, if you leave more value on the table investors are happy, more issues can come to the market. But I am also conscious that the promoters also take a lot of risk and a lot of effort to build companies and bring them to level where NHPC and Adani both are."



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