Adani Ports up 2% on acquisition of 40% stake in Snowman Logistics

Shares of Adani Ports and Special Economic Zone (SEZ) gained nearly 2 per cent in the early trade on the BSE on Monday after Adani Logistics, a subsidiary of the company, announced on Friday it had signed an agreement to acquire a 40.25 per cent stake in Snowman Logistics from Gateway Distriparks for Rs 296 crore.

The purchase price of Rs 44 per share is a 3.2 per cent premium to the market price of December 27, and a 12 per cent premium to the 60-day volume weighted average price (VWAP), said a company release. 

At 09:52 am, the stock was trading over a per cent higher at Rs 368 apice on the BSE. Snowman Logistics was trading nearly 2.5 per cent higher at Rs 43.70 apiece. In the early trade, it rallied up to over 7 per cent. Gateway Distriparks too gained over 4.6 per cent to trade at Rs 115.

The S&P BSE Sensex, on the other hand, was trading flat at Rs 41,656, up 81 points or 0.20 per cent.

Shares of Adani Ports have fallen 6 per cent in the calendar year 2019 as against around 13 per cent rise in the Nifty50 index.

Global brokerage firm CLSA has maintained 'Buy' rating on the stock with the target price of Rs 485. The brokerage says that the stock has corrected 6 per cent YTD due to exit of the investors. "Rate Adani BUY as it trades at a 12 per cent discount to Indian companies," it said.

Analysts at IDFC Securities has maintained 'outperform' on the stock with the target price of Rs 466. The brokerage says that Snowman acquisition is in-line with the company's strategy and company's focus should help in driving the yield.

“The acquisition is in line with our strategy and vision to be a leader in providing integrated logistics services in India and moving from port gate to customer gate. Cold chain is key product in customer gate strategy given India’s consumer driven demand,” Karan Adani, chief executive officer at APSEZ was quoted as saying.

As part of the transaction, Adani Logistics will make a mandatory open offer as per the Substantial Acquisition of Shares and Takeover Guidelines, 2011 for a maximum 26 per cent of the public shareholding in the company.