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Adani Power (ADAN.BO)
Research Tactical Idea
We believe the share price will fall relative to the country index over the next 15 days.
This is because of an announced merger. Adani Power has informed the BSE that the board has approved the merger of
group company Growmore Trade and Investment Private Limited, Mauritius with itself effective April 1, 2011. The Rs 23.6
bn stock deal will involve APL issuing 213.2 mn equity shares. We believe the stock could fall on concerns about the
valuation of the deal.
We estimate that there is about a 60% to 70% or "likely" probability for the scenario.
Estimated probabilities are illustrative and assigned subjectively based on our assessment of the likelihood of the
scenario.
Stock Rating: Underweight
Industry View: Cautious
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