Adani Enterprises Ltd (ADANI) shares tanked by 2% on Wednesday as firm fixes Rs 20,000 Cr FPO price band. Should you buy? Shares of Adani Enterprises Ltd (ADANI) crashed by 2% in intra-day trade on Wednesday after the company announced it has fixed the floor price for Foreign Portfolio Investors (FPO) participation in its Rs 20,000 crore coal mine project in India. The decision comes amid signs that the BJP-led central government is losing patience with the company over delays in finalising the investment agreement. The proposed mine would be the biggest coal project in India and has been dogged by controversy since its inception. Environmental activists have voiced concerns over the potential damage to local ecosystems, while campaigners against coal have accused Adani of fuelling climate change. Adani has rejected such criticisms, insisting that its project will create jobs and boost economic growth. However, analysts suggest that the fall in share prices may reflect investor uncertainty about whether the government will approve the investment agreement. Should you buy Adani Enterprises Ltd stock today? That depends on a number of factors, including your long-term investment goals and assessment of the company’s current financial position.
Adani Enterprises shares fall 2% on news of floor price fixing
The stock prices of Adani Enterprises Ltd. (ADANI) declined 2% in early trade today after the firm announced that it had fixed the minimum selling price for coal at Rs .60,000 per metric tonne, below the floor price proposed by the Coal and Power Ministry.
This comes as a relief to state-owned Coal India Ltd., which has been lobbying for a floor price above Rs .70,000 per metric tonne. However, analysts say that it is unlikely that Adani will be able to sell coal at this rate due to competition from other producers.
Should you buy Adani Enterprises shares?
With domestic production likely to remain constrained, there is little upside potential for ADANI shares at current levels. Given that there are other more promising options available in the coal sector, such as SABMiller Plc (AAPL) and Vedanta Resources Plc (VEDL), it may not be worth buying into this stock right now.
If you should buy Adani Enterprises stocks now
Adani Enterprises (AEON) shares are down 3% in early trade on Thursday after the firm announced that it has set a floor price for its FPO securities of Rs and a Cr value band. Given this news, should you buy AEON stocks now?
There is no one definitive answer to this question. Each investor will have to weigh up their own individual risk tolerance and investment goals before deciding whether or not to buy AEON stock.
However, we think it’s worth noting that the floor price and Cr value band are only indicative – they do not guarantee that AEON stock will be sold at these prices. If the market values AEON higher than the band, then shareholders may end up selling their shares at a lower price. Alternatively, if the market values AEON lower than the band, then shareholders may be forced to sell their shares at a higher price. So it’s important to remember that these prices are just guidelines – don’t get too excited or discouraged by them!
What this news means for the future of the company
This news means that Adani Enterprises Ltd. ( ADANI ) is facing a lot of financial troubles as they are having to fix the Rs 10,000 crore first reserve price ( FPO ) price band and also the floor price for their coal mine in Jharkhand.
Since this news has come out, ADANI’s share prices have fallen by 3%. This means that if you are considering buying any ADANI stock, now may not be the best time to do so as the company may not be able to repay its debts.
Although this news could mean trouble for ADANI, it does not necessarily mean that the coal mine will be shut down. The Coal India Ltd. ( CIL ) is currently in talks with Adani Enterprises Ltd., and it is possible that these negotiations could lead to CIL selling Adani Enterprises a more reasonable coal mine floor price.
If you are looking to buy ADANI stock, we recommend waiting until more information becomes available before doing so as there is a chance that things may not turn out as bad as they seem at this point.
