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Monday, 27 July 09
ADANI POWER'S $625 MILLION IPO TO GENERATE HOT DEMAND
 WSJ reported that, Adani Power, the electricity generating unit of India's Adani Enterprises Ltd., is set raise up to US$625 million in what analysts say will be a hotly contested initial public offering.
Gearing up to list next month after stalling when markets were hit early last year, Adani Power's revived IPO will be the largest in India since Reliance Power's $2.9 billion IPO in January 2008.
While Adani Power has yet to have up-and-running power plants - the first phase of a 330-megawatt plant in Mundra, in the western Indian province of Gujarat, comes on line this month - and its IPO pricing isn't cheap, analysts say the offering is a good buy.
Controlled by the Adani Group, which is known for delivering projects on time, Adani Power also has the advantage of being a power producer in a country where electricity shortages are common.
"Adani Power is a well-thought-through venture with a focus on high-power deficit states (in India), 25-year power purchase agreements with a 72% off-take, and 15 years of coal supplies guaranteed," Bhargav Buddhadev, a power sector analyst with Noble Research, said in a recent note.
The 301.65-million share offer, which has an indicative price range of 90 rupees-100 rupees ($2.07) , raising $625 million at the top end, opens for subscriptions from retail and institutional investors Tuesday and ends Friday.
The company is 81.5% owned by family controlled Adani Enterprise Ltd., a unit of the ports-to-property conglomerate Adani Group, and 8.5% by UK private equity firm 3i Group Plc.
After the IPO, Adani Power will be 70.2% owned by Adani Enterprises, 7.4% by 3i and 1.2% by Capital Trade & Investment Pvt Ltd, another unit of the Adani Group.
The share sale comes as India faces acute energy shortages that have increased over the years despite a growing economy.
Between April and May this year, India had a peak energy deficit, which calculates the difference between energy demand and supply, of 12.3%. In the western part of the country, where Adani Power is setting up four power plants, the deficit was 15.9%, the highest for any region.
Two of the new power plants, in Mundra and Dahej, are in Gujurat; the Kawai plant is in Rajasthan, and the Tiroda one in Maharashtra.
The four have "attractive economics with a payback to IPO equity investors in two and a half years if the project goes to plan," Mr. Buddhadev added, referring to the fact that the company has already signed 25-year contracts with the state-owned electricity boards in those places.
Adani Power has signed those 25-year pacts for 72% of the power its plants are set to produce at tariffs ranging between 2.64 rupees and 2.94 rupees per unit. The remaining 28% will be sold to individual merchants at spot rates, which are currently hovering around 8-9 rupees per KWh. The production price is around 2 rupeess per KWh.
"Adani Power has close to 30% of its capacity set to be sold on a merchant basis, which will give higher returns," said Deven Choksey, the managing director of Mumbai-based brokerage K.R.Choksey Shares & Securities, who recommends the stock to long term investors.
Independent investment advisor and National Stock Exchange member S.P. Tulsian, who sees the 100 rupees top end of the price band as good value said the company can theoretically make annual returns of 35% on its shareholder funds, given "assured returns available to power projects and with (a relatively higher debt-to-equity) gearing of about 4:1."
CLSA's Abhishek Tyagi predicts that the company will record earnings per share of 3 rupees, 5.8 rupees and 10.7 rupees for the financial years ending March 31, 2010, 2011 and 2012 respectively.
This translates to a price to earnings ratio of 33.3 times, 17.2 times and 9.3 times forward earnings respectively, using the upper end of the indicative IPO price range of 90-100 rupees.
But there are risks, partly related to the fact that the company's plants have yet to start production. At a 100 rupees IPO price, Adani Power trades at 3.8 times price-to-book compared with a lower 3.1 times for the sector, according to Noble Research's Buddhadev.
The Chinese equipment to be used by Adani Power has historically been less reliable and not as efficient as locally made turbines, and the company's dependence on coal from Indonesia exposes the company to regulatory and commercial risks, Mr. Buddhadev said.
Adani Group also has licenses to operate just two of the three mines it needs coal from in Indonesia.
Still, the Adani Group's ability to finish large projects on time will stand Adani Power in good stead, analysts said. Adani Power has four thermal power plants under various stages of development and planning with a combined planned capacity of 9900MW. The company plans to utilize the share sale proceeds to part fund the set up of power units in Mundra and Tiroda.
"While other power companies take between four to five years to implement a project of this size, the fact that Adani Power will only take three years, works to the advantage of the investor," Mr. Choksey said.
Source: WSJ India
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Friday, 14 August 09
GUACOLDA STARTS THIRD COAL-FIRED UNIT
Macorship reported that, Chile’s Empresa Electrica Guacolda said that the third unit at its Guacolda coal-fired power plant began supplying po ...
Thursday, 13 August 09
RIO PREPARES COAL IPO AFTER FAILING TO FIND BUYER
Bloomberg reported that, Rio Tinto Group, the world’s third- largest mining company, is preparing an initial public offering for its U.S. ...
Thursday, 13 August 09
NOBLE'S PROFIT DOUBLES ON GLOUCESTER COAL ACQUISITION
Bloomberg reported that, Noble Group Ltd., a Hong Kong-based supplier of raw materials from soybeans to coal, said second- quarter profit more than ...
Thursday, 13 August 09
CHINA COAL-PRICES UNCHANGED, BUT LIKELY TO MOVE HIGHER
Alibaba reported that, Spot coal prices in China's top coal port Qinhuangdao were unchanged from a week earlier, but are still looking bullish in t ...
Thursday, 13 August 09
INDONESIA'S BERAU COAL SEES 2010 OUTPUT UP 16 PCT
Reuters reported that, Indonesia's fifth-largest coal miner, PT Berau Coal, expects 2010 production to be nearly 16 percent higher than this year, ...
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- Chamber of Mines of South Africa
- Wilmar Investment Holdings
- Xindia Steels Limited - India
- Riau Bara Harum - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Rio Tinto Coal - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- ICICI Bank Limited - India
- Grasim Industreis Ltd - India
- TeaM Sual Corporation - Philippines
- Petron Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- Ministry of Transport, Egypt
- Energy Link Ltd, New Zealand
- CNBM International Corporation - China
- Pipit Mutiara Jaya. PT, Indonesia
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- Indonesian Coal Mining Association
- IEA Clean Coal Centre - UK
- White Energy Company Limited
- AsiaOL BioFuels Corp., Philippines
- Meralco Power Generation, Philippines
- Barasentosa Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Energy Development Corp, Philippines
- Wood Mackenzie - Singapore
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- Madhucon Powers Ltd - India
- Sinarmas Energy and Mining - Indonesia
- New Zealand Coal & Carbon
- Anglo American - United Kingdom
- Ministry of Mines - Canada
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meenaskhi Energy Private Limited - India
- Star Paper Mills Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karbindo Abesyapradhi - Indoneisa
- Bangladesh Power Developement Board
- Coastal Gujarat Power Limited - India
- Aditya Birla Group - India
- Siam City Cement - Thailand
- Directorate Of Revenue Intelligence - India
- Parry Sugars Refinery, India
- Leighton Contractors Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- PNOC Exploration Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Trasteel International SA, Italy
- Jindal Steel & Power Ltd - India
- PowerSource Philippines DevCo
- Lanco Infratech Ltd - India
- Chettinad Cement Corporation Ltd - India
- Planning Commission, India
- Formosa Plastics Group - Taiwan
- Gujarat Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Globalindo Alam Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Semirara Mining Corp, Philippines
- ASAPP Information Group - India
- GN Power Mariveles Coal Plant, Philippines
- Larsen & Toubro Limited - India
- Alfred C Toepfer International GmbH - Germany
- Kobexindo Tractors - Indoneisa
- Sakthi Sugars Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Latin American Coal - Colombia
- Coal and Oil Company - UAE
- Samtan Co., Ltd - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Merrill Lynch Commodities Europe
- Borneo Indobara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kideco Jaya Agung - Indonesia
- Sojitz Corporation - Japan
- Straits Asia Resources Limited - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- International Coal Ventures Pvt Ltd - India
- Mercuria Energy - Indonesia
- Malabar Cements Ltd - India
- PTC India Limited - India
- Mintek Dendrill Indonesia
- Ceylon Electricity Board - Sri Lanka
- Central Java Power - Indonesia
- Power Finance Corporation Ltd., India
- Essar Steel Hazira Ltd - India
- SMC Global Power, Philippines
- Sree Jayajothi Cements Limited - India
- Cement Manufacturers Association - India
- Minerals Council of Australia
- Australian Coal Association
- Directorate General of MIneral and Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhatia International Limited - India
- Goldman Sachs - Singapore
- Savvy Resources Ltd - HongKong
- Orica Mining Services - Indonesia
- Port Waratah Coal Services - Australia
- Commonwealth Bank - Australia
- Edison Trading Spa - Italy
- Jaiprakash Power Ventures ltd
- Romanian Commodities Exchange
- Bukit Baiduri Energy - Indonesia
- Indogreen Group - Indonesia
- Attock Cement Pakistan Limited
- Electricity Authority, New Zealand
- Central Electricity Authority - India
- Cigading International Bulk Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Timah Investasi Mineral - Indoneisa
- Uttam Galva Steels Limited - India
- Thai Mozambique Logistica
- Karaikal Port Pvt Ltd - India
- Electricity Generating Authority of Thailand
- McConnell Dowell - Australia
- Australian Commodity Traders Exchange
- Aboitiz Power Corporation - Philippines
- GVK Power & Infra Limited - India
- Economic Council, Georgia
- Iligan Light & Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Pendopo Energi Batubara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Marubeni Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Indian Energy Exchange, India
- Ind-Barath Power Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Makarim & Taira - Indonesia
- The Treasury - Australian Government
- Sindya Power Generating Company Private Ltd
- Oldendorff Carriers - Singapore
- Posco Energy - South Korea
- Semirara Mining and Power Corporation, Philippines
- Renaissance Capital - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Finance - Indonesia
- Orica Australia Pty. Ltd.
- Therma Luzon, Inc, Philippines
- Binh Thuan Hamico - Vietnam
- GMR Energy Limited - India
- Billiton Holdings Pty Ltd - Australia
- Carbofer General Trading SA - India
- Sical Logistics Limited - India
- Africa Commodities Group - South Africa
- Tata Chemicals Ltd - India
- Salva Resources Pvt Ltd - India
- Medco Energi Mining Internasional
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement PLC, Thailand
- Mjunction Services Limited - India
- The University of Queensland
- SMG Consultants - Indonesia
- Eastern Coal Council - USA
- Miang Besar Coal Terminal - Indonesia
- Global Business Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Simpson Spence & Young - Indonesia
- Global Coal Blending Company Limited - Australia
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- Georgia Ports Authority, United States
- Kepco SPC Power Corporation, Philippines
- Agrawal Coal Company - India
- India Bulls Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Bayan Resources Tbk. - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Ambuja Cements Ltd - India
- Heidelberg Cement - Germany
- SN Aboitiz Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Bhushan Steel Limited - India
- Intertek Mineral Services - Indonesia
- Antam Resourcindo - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- LBH Netherlands Bv - Netherlands
- Bhoruka Overseas - Indonesia
- GAC Shipping (India) Pvt Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dalmia Cement Bharat India
- MS Steel International - UAE
- Bharathi Cement Corporation - India
- Standard Chartered Bank - UAE
- Tamil Nadu electricity Board
- Holcim Trading Pte Ltd - Singapore
- Indian Oil Corporation Limited
- Metalloyd Limited - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- Vizag Seaport Private Limited - India
- Mercator Lines Limited - India
- European Bulk Services B.V. - Netherlands
- Indo Tambangraya Megah - Indonesia
- Independent Power Producers Association of India
- Kapuas Tunggal Persada - Indonesia
- Altura Mining Limited, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- Coalindo Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Vedanta Resources Plc - India
- Eastern Energy - Thailand
- VISA Power Limited - India
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- Deloitte Consulting - India
- Interocean Group of Companies - India
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