Adani Ports

Adani Ports and Special Economic Zone Ltd (APSEZ) on 30-05-19 had informed that the Company shall be considering a proposal of Buyback of the fully paid-up equity shares of the at its Board Meeting to be held on 04-06-19. Adani Ports Buyback approved by its Board comprises proposal for buyback up to 3,92,00,000 Equity Shares at a price of Rs. 500 (Rupees Five Hundred Rupees only) per Equity Share for an aggregate amount not exceeding Rs. 1,960 Crores. The Adani Ports Buyback is 1.89% of the paid up equity share capital of the Company as at March 31, 2019) and is on a proportionate basis under “Tender Offer” route. The Buyback Offer Size represents 9.94% of the total paid-up Equity Share Capital and free reserves of the Company. Record date for Adani Ports Buyback is June 21, 2019.

See List of all Forthcoming and Recent Buybacks

Buyback Newsuyback

Updates

  • Adani Ports Buyback Entitlement Ratio 20.66%
  • Adani Ports Buyback date 06-09-19 : 20-09-19
  • RD 21-06-19

Adani Ports Buyback : Key Info

Buyback
Type Tender
MP befo announcement406.55
Announcement 30-05-19
MP after this416
MP befo BM424.75
Board meet4-6-19
Buy Back Price500
% Premium on MP22.99%
MP after BM 425.55
BuyBack Size- Rs. Cr1960
BuyBack Size- Shares39200000
Tot No.of shares2,070,951,761
% Buyback1.89%
Equity Capital- cr414.19
FV of Share in Rs.2
Shares reserved- Retail 5,880,000
Record Date21-06-19
Buy Back Issue date06-09:20-09-19
Shares on RD 28462393
Buyback Entitlement20.66%
Valid Bids
Shares Tendered
Tendering ratio
Retail response
Aceeptance %

Adani Ports Buyback : Acceptance Ratio Estimate

This framework is based on estimation of shareholding of Adani Ports shareholders  who hold around 500 number of shares. To this we have added estimates for
1) Few additional purchase  of Shares by existing shareholders with eye on earning additional returns through buyback.
2) Purchase of Shares by Arbitrage investors

Based on approximations indicated above and considering a moderate tendering ratio, under normal circumstances Adani Ports Buyback could have acceptance ratio of 35-55%, a figure that will depend significantly on price movement of the stock in coming days & tendering ratio.

Estimated Returns: Adani Ports Buyback

Shares Bought
400
Nos.
Buyback Price500
Absolute Returns
Price when posted421.00
Investment (Rs.)168400
MP Aft Buybk
Acceptance %350360370
35%-4.39%-2.85%-1.31%
45%-0.83%0.48%1.78%
55%2.73%3.80%4.87%

This post is purely for informative and educational purpose and is in no way suggestive of taking any position in the counter. Profit or Loss in  any buy sell operation in stocks is associated with significant risk of capital loss. For more on Buyback Benefits and other issues please refer the earlier Posts.

 Buyback of Shares: A Primer for Retail Investors

About Adani Ports and Special Economic Zone (APSEZ)

  • APSEZ is an integrated player consisting of 3 verticals
    • Ports
    • Logistics
    • Special Economic Zone
  • The company has pan India presence in ten locations with the flagship Mundra port in the Gulf of Kachchh which is also India’s largest commercial port.
  • APSEZL commenced trial operations at Mundra port in 1998 and commercial operations in 2001. Since then, it has grown to become the largest port in the country by cargo handling capacity and actual cargo volumes handled.
  • The port offers handling services for all kinds of cargoes viz. bulk- dry and liquid, crude and containers. Apart from its port operations, APSEZL is also the approved developer of a multi-product SEZ at Mundra and its surrounding areas. Further through its majority/ wholly owned SPVs, APSEZL has a presence in the logistics business (container trains and ICDs), port/terminal and infrastructure operations in Dahej(Gujarat), Hazira (Gujarat), Mormugao (Goa), Dhamra (Orissa), Kandla (Gujarat), Vizag (Andhra Pradesh), Ennore (Tamil Nadu) and Vizhinjam (Kerala) ports. It is also the operator for the Kattupalli (Tamil Nadu) port.
  • All the ten ports and terminals of APSEZ are strategically located and represent 24% of the country’s port capacity, 
  • APSEZ in May 2019 has signed an agreement to develop and operate a container terminal at Yangon Port in Myanmar.

Triveni Engineering: Price Trend, Summary of Financials

adani ports and special economic zone ltd price chart

Financial Overview

Market Cap- Rs. Cr87,964
CMP in Rs.425
Revenue 12 m ttm10,925
Net profit-cr ttm3,990
Equity Share Capital414.19
Face Value2
EPS TTM19.27
Price / Earning (PE)22.05
Book Value98.95
Price / BV4.29
ROCE %16.80%
ROE  %19.68%
Dividend Yield0.47%
Sales 3 yr CAGR22.55%
Debt / Equity Ratio1.06
52 week High/Low430.60 / 292.10

Assessment: Adani Ports Buyback

  • Adani Ports strategy of having multiple ports across the coastline of India at various locations and diversifying the cargo mix nay continue to be pay rich dividend to the company in near future.
  • Adani’s market share in all India cargo volume has increased by 200 basis points to 21% and its market hare in all India container volume increased by 100 basis points to 34%. in the last fiscal.
  • Promoter’s stake has increased in Adani Ports.
  • Promoters have pledged 42.31% of their holding
  • Adani Ports had a flat quarter as depicted below
ParticularsMar-19Dec-18Sep-18Jun-18Mar-18
Net Sales3082.492823.912608.012411.033182.86
Total Income3492.723168.882922.322703.863487.29
PBIDT2382.522556.41447.311498.722016.04
Interest443.01392.59295.77253.82391.93
PBDT1939.512163.811151.541244.91624.11
Adjusted PAT1340.881408.6605.5690.74926.77
EPS (Unit Curr.)6.216.82.923.344.48
Equity414.19414.19414.19414.19414.19
PBIDTM(%)77.2990.5355.4962.1663.34
PATM(%)42.6450.2523.5528.9329.19
  • Adani Ports .Promoter holding in APSEZ is about 62.3%
  • Company is not debt free.
  • Adani Ports board announced that as per new Shareholder return policy the company will distribute, every year, 20%-25% of its Profit After Tax either as a dividend or share buyback or a combination of both.
  • Adani Ports Buyback price is at a good premium to its prevailing market price. However the stock has rallied considerably after the announcment for buyback. The stock already moved up from Rs. 380 at the time of announcement by 12% (CMP 425). This has also be aided by +ve sentiment for Adani group stock post the election results.
  • In the recent past there have been many concerns regarding indebtedness of Adani group and concerns on the pledged shares. Such concerns can surface again on any adverse development.
  • Considering the size of issue the company there is no need for a postal ballot to seek share holders approval and hence the total time period will be lower than normal buybacks.
  • Adani Ports stock is in F&O which may keep the stock volatility in check post buyback.
  • Though there have been concerns on share pledge and debt of Adani Group in general, the group stocks have doe well post the election outcome. I may particpate in Adani Ports buyback, in a small way, if such possibility arises at reasonable price.

Standard disclaimer:  I am not a SEBI registered analyst. I may have vested interest in every stock I discuss. Please do your own due diligence as stock market investments have high degree of inherent risk. Further the data in the post is prone to errors.