Adani Enterprise FPO: Discount share sale an attempt to woo retail investors

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Adani Enterprise FPO: Discount share sale an attempt to woo retail investors

Adani Enterprises FPO: The mega share sale will address the concerns of the limited free float and dominance of a few foreign portfolio investors, says analyst

Indian tycoon Gautam Adani, who added $40 billion to his wealth last year after a blistering stock rally, wants validation from the investing public and critics who question the forces pushing up his companies’ share prices.

To woo mom-and-pop investors to buy into his ports-to-power empire’s flagship, Adani Enterprises Ltd. will sell new shares at a discount and allow payments in three installments when it rolls out its $2.5 billion follow-on offer later this month — an unprecedented move for one of the country’s hottest stocks. For a stock that has rallied over 1,400% since early 2020, sweeteners are crucial to woo retail investors.

The country’s biggest follow-on share sale serves many ends. A diversified shareholder base gives greater credibility in the stock market and cements Adani’s legacy as a wealth creator for millions of investors, not just himself. A bigger constituency of shareowners may trigger more analyst coverage — just two brokerages track it — of the thinly traded stock. And using a quarter of the proceeds to repay debt will mute some criticism of the empire’s elevated leverage.

As gold hits new high, experts recommend these two stocks

Gold rates may continue is uptrend and go up to ₹60,000 per 10 gm levels by Diwali 2023, say experts. Gold rates today climbed to a new life-time high of ₹56,746 per 10 gm in early morning deals on Friday, breaching previous high of ₹56,588 levels

Stocks to watch today: Following disappointing US data that renewed fear of global economic recession, gold rates today climbed to new life-time high of ₹56,746 per 10 gm levels in domestic market, breaching its previous record high of ₹56,588 levels that it made on Thursday deals. As gold rates today climbed to a new high, stock market experts have said that it would have a direct impact on those financial stocks that deals heavily in gold loan. 

 Stock market experts went on to add that in India there are limited financial institutions that have a bulk business in gold loan. But, Muthoot Finance and Manappuram Finance have huge exposure in gold loan lending. As gold prices are expected to continue uptrend in medium to long term, they recommended positional investors to buy Muthoot Finance and Manappuram Finance stocks.

Gold price outlook

Expecting gold rates rally to further continue, A Researcher said, “Gold rates today climbed to record high after disappointing US data fueled fear of global economic recession. Apart from this, other triggers like inflation, Covid-19, etc. are still round the corner and hence in medium to long term too, gold rates are expected to continue its uptrend. In short term, gold prices are expected to hit ₹57,000 per 10 gm levels whereas by Diwali 2023, we are expecting gold rates to go up to ₹60,000 levels.”

 Stock Market LIVE: Indices remain flat; HUL, Asian Paints drag; CIL gains

Fear of recession keeps investors worried: Indian stock markets started flat on Friday as fears of a recession keep investors on the hook. FMCG and Consumer Durable indices drag; Bank indices climb. HUL and Asian Paints shed at open, while Coal India and Tata Motors gain. 

A Fed pledged a tough line on inflation, saying the central bank would stay the course in its fight. This added fuel to the worries of recession among investors. Back in India, traders will also keep an eye on the earnings report.

Tata Tech IPO, the first from the Tatas after 2004, should cheer investors

Tata Motors Ltd issued a statement to all the stock exchanges on December 12, 2022, soon after the conclusion of its board meeting on the same day, that it proposed to explore the possible partial divestment of shares in its wholly-owned subsidiary Tata Technologies Ltd through the initial public offer (IPO) route sometime in the future in what is good news for Tata Motors shareholders because it helps the company unlock value and reduce its debt burden.

Yet, the market has not greeted this news enthusiastically. The share price rose initially on the news but then dropped and not recovered since then. This could be due to an overall bearish sentiment that has gripped markets worldwide. Alternatively, it could be that investors have chosen to sit on their hands till the Tata Motors management shares more information about the proposal and the full purport or details of the disinvestment is available. Or, as a third option, investors do not perhaps view the disinvestment as value accretive to the company.

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