Adani Enterprises, the holding company of the Adani Group, is planning a mega restructuring of its businesses under which the shareholders of holding firm, Adani Enterprises are likely to get direct shares in its power and port subsidiaries.
The company’s board is meeting on Friday to take a call on the restructuring proposal.
According to a banker, Adani Enterprises has appointed KPMG as an advisor to the restructuring, under which AEL shareholders may get 10 Adani Port shares for every 11 shares held in Adani Enterprises.
Similarly, AEL shareholders may get 20 shares in Adani Power for every 11 shares held in AEL.
Post restructuring, the Adani family – which holds 75% stake in AEL — will hold direct shares in power and power business instead of holding the shares via Adani Enterprises which attracts holding company discount as compared to peers. AEL holds 75% stake in both power and port companies.
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 say this restructuring will help Adani companies to get loans on attractive terms and AEL’s stake will fall to mid-50s for both power and port subsidiaries from the current 75%.
On Thursday, shares of Adani Enterprises rallied 4.83% to close Rs 582 on back of heavy volumes on the bourses. The stock hit a high of Rs 596, its highest level in past 40-months, during intra-day trade on BSE. Earlier, on September 22, 2011, it touched high of Rs 610 in intra-trade trade.
Among the other group stocks – Adani Power surged 3.51 per cent to close at Rs 51.55 on BSE. Adani Port and Special Economic Zone was up 1 per cent to close at Rs 343 after hitting high of Rs 349 during intra-day trade on BSE.
Since January 16, the Adani Enterprises stock has outperformed the market by surging 17% from Rs 500. This was after its board approved divestment of stake in Maharashtra Eastern Grid Power Transmission Company (MEGPTCL) to its subsidiary, Adani Transmission. The benchmark S&P BSE Sensex gained 5 per cent during the same period.
Adani Power is considering acquiring the 600-MW Korba plant from Avantha Power and Infrastructure for more than Rs 4,200 crore,, which, according to analysts, appears more expensive than the Rs 6,000 crore offered for the 1,200 MW, operational, imported-coal-based power project at Udupi, which had cost-plus sale arrangement for its entire capacity. In contrast, Korba is committed to sell 5% of power at energy cost and 30% under the cost-plus arrangement to the home state; however, sale arrangements for its balance 65% capacity remain unclear. The Lanco deal is currently under dispute.
Adani Power is also considering selling its 90% ownership in Adani Transmission (India) Ltd to its promoter Adani Enterprise for Rs 300 crore. The transmission assets were formerly a part of the standalone business and earned revenues of Rs 290 crore with losses of Rs 130 crore in FY2014 and revenues of Rs 500 crore with losses of Rs 100 crore in 9MFY15. Post restructuring, Adani Enterprises will focus on mining, edible oil business and trading businesses.