Adani Power stock zooms 8% after board clears merger of six entities

Shares of Adani Power rose over 8 per cent today after the Adani Group firm said its board has approved an amalgamation scheme for the merger of its six wholly owned subsidiaries with itself. Adani Power stock touched an intraday high of Rs 134.35, rising 8.57 percent against the previous close of Rs 123.75 on BSE. The share has gained after two days of consecutive fall.

A total of 69.50 lakh shares of the firm changed hands, amounting to a turnover of Rs 90.72 crore. Market cap of the firm rose to Rs 50,776 crore on the BSE.

Adani Power share is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. The large cap stock has gained 29.41 per cent in one year and risen 31.88 percent since the beginning of this year.

The stock hit a 52-week low of Rs 69.95 on August 24, 2021 and a 52-week high of Rs 167.05 on June 9, 2021.

"The Board of Directors of Adani Power Ltd at its Meeting held on March 22, 2022, approved, subject to requisite approvals/consents, the Scheme of Amalgamation of various wholly-owned subsidiaries of the company," a BSE filing said.

The subsidiaries to be merged with Adani Power are Adani Power Maharashtra Ltd, Adani Power Rajasthan Ltd, Adani Power (Mundra) Ltd, Udupi Power Corporation Ltd, Raipur Energen Ltd, and Raigarh Energy Generation Ltd. These companies are wholly owned subsidiaries of Adani Power.

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The appointed date of the scheme will be October 1, 2021. The entire assets and liabilities of these six arms will be transferred to Adani Power.

The proposed amalgamation envisaged under this scheme is intended to achieve size, scalability, integration, improved controls, cost and resource use optimisation, greater financial strength and flexibility, thereby building a more resilient and robust organisation that address dynamic business situations and volatility in various economic factors in a focused manner, to achieve improved long-term financial returns, it stated.

There will be no change in the equity shareholding pattern of the company under the scheme, as no shares are being issued by the firm in connection with the scheme, it added.

The six arms of Adani Power are also engaged in the business of generation and sale of power.

Adani Power reported Rs 218.49 crore consolidated net profit for December quarter 2021-22 against a loss of Rs 288.74 crore in the year-ago period. Total income stood at Rs 5,593.58 crore in the quarter against Rs 7,099.20 crore in the same period a year ago. Sales fell 22.25 per cent to Rs 5,360 crore as compared to Rs 6,894 crore in the corresponding quarter last fiscal.

Operating profit excluding other income rose 9.11 per cent to Rs 1770.77 crore in Q3 against Rs 1622.94 crore in the corresponding quarter of previous fiscal. Total expenses fell to Rs 5,389.24 crore in Q3 against Rs 7,304.95 crore in the year-ago period.