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Shares Of Adani Ports And Special Economic Zone (APSEZ) Climbed 6 Per Cent To Rs 371 In Intra-Day Trade On The BSE On Monday After The Company Announced That The Proposed Share Buyback Offer Will Open On September 6, 2019, And Close On September 20.

Adani Ports & Special Economic Zone Announced In June, Shortly After Earnings, That It Would Buy Back Up To 39.2mm Shares At A Price Of Up To Rs 500 Each. That Was When The Shares Were Trading At ₹425 Each. That Was At A Premium Of 17.6%. Since Then, The Shares Have Fallen.

On Friday The Company Confirmed That It Would Buy Shares Back In A Tender Offer Between 6 September And 20 September 2019 At A Price Of ₹500/Share

That Is Now A Premium Of 43.1%. 

39.2mm Shares Is Only 1.893% Of Shares Outstanding, But It Is Still Something. And It Is The Largest Buyback The Company

Company Overview:

APSEZ Is The Seamless Integration Of 3 Verticals Consisting Of Ports, Logistics And Special Economic Zone. The Company Has Pan India Presence In Ten Locations With The Flagship Mundra Port In The Gulf Of Kachchh, Also India’s Largest Commercial Port.

Business Of The Company:

  1. Logistics
  2. Industrial Lands
  3. Ports & Terminals

 Details Of Buyback:

  • ADANI Port has approved the proposal for the buy-back by the Company of up to 3,92,00,000 Equity Shares (being 1.89% of the total paid-up Equity Share Capital of the Company) from the equity shareholders of the Company as on June 21, 2019 (the “Record Date”) (“Eligible Shareholders”).
  • The (“Buy-Back”) is to be done at a price ofRs. 500 (Rupees Five Hundred Rupees only) per Equity Share (the “Buy-Back Offer Price”), for an aggregate amount not exceeding Rs. 1,960 Crores (Rupees One Thousand Nine Hundred Sixty Crores only),
  • The “Maximum Buy-Back Size”, being 9.94% of the total paid-up Equity Share Capital and free reserves of the Company as per the audited standalone financial statement as at March 31, 2019) from the Eligible Shareholders of the Company on a proportionate basis through ” Tender Offer route”

How To Participate In Buyback?

  1. Firstly, to be eligible for the buyback the investor should have shares ofAdani Ports Limited Buyback 2019 in demat or physical form as on the record date [ 21.06.2019 ]
  1. Once you have shares in demat, you can participate in the buyback process which is opening from [ 06.09.2019 to 20.09.2019] by selling your shares through your broker on NSE or BSE.
  1. Then on [ 01.10.2019 ], the payment will be given to you for accepted shares and unaccepted shares will be returned to your demat account.

Stock Quint View & Recommendation:

  • The company has shown strong growth in terms of Revenue in the last 4 years.
  • The Revenue is almost doubled in the last 4 years means CAGR growth of 18%.
  • The Profitability also went up 2x in the last 4 years.
  • For FY18-19, the company has given an EPS of 19.
  • So currently share is trading at P/E multiple of 21x. 4.
  • The company has Debt of ~ 25000 Cr on balance sheet. The D/E stands at 0.92.

The Buyback Size Is Decent. The Expected Return As On Now Is 40 – 45%. In FY18-19, The Company Has Shown Decent Growth In Bottom-Line In Spite Of Week Top-Line Which Is Excellent. Currently, The Share Is Trading At P/E Of 22 Which Is Reasonable Valuation. Thus The Future Outlook Of The Stock Is Positive With Attractive Valuations.

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