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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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Thursday, 13 August 09
JAYPEE GROUP. L&T INK RS 4,000-CRORE (US$ 824,818,084) DEAL
Second order bagged by L&T in the supercritical segment.
Jaiprakash Power Ventures Ltd (JPVL), promoted by the $7-billion Jaypee group, has s ...
Wednesday, 12 August 09
COAL INDIA TO IMPORT 4 MLN T 2009/10 - MEDIA
State-run Coal India Ltd plans to directly import 4 million tonnes of coal in the current fiscal year to March 2010, Chairman Partha Bhattacharyya s ...
Wednesday, 12 August 09
CHINA'S LARGEST COAL PRODUCER TO SET UP COAL RESERVES
China's National Development and Reform Commission has commissioned China Shenhua Energy Co., the nation's largest coal producer, to build 10 stor ...
Wednesday, 12 August 09
NALCO SMELTER CONSTRUCTION MAY FACE DELAY
The Jakarta Post reported that, India’s state-run National Aluminum Company (Nalco) may postpone the construction of an aluminum smelter in In ...
Wednesday, 12 August 09
COAL MINE PLAN SHOT DOWN OVER GREEN CONCERNS
The Times of India reported that, In a major setback to Adani Powers, the principal chief conservator of forests (PCCF) has rejected its proposal fo ...
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- Chettinad Cement Corporation Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Bhatia International Limited - India
- Australian Commodity Traders Exchange
- OPG Power Generation Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- New Zealand Coal & Carbon
- Petron Corporation, Philippines
- Ambuja Cements Ltd - India
- Coal and Oil Company - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- Star Paper Mills Limited - India
- Romanian Commodities Exchange
- Intertek Mineral Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Goldman Sachs - Singapore
- Bayan Resources Tbk. - Indonesia
- Jaiprakash Power Ventures ltd
- The University of Queensland
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- Baramulti Group, Indonesia
- Orica Mining Services - Indonesia
- Xindia Steels Limited - India
- Heidelberg Cement - Germany
- Indonesian Coal Mining Association
- Timah Investasi Mineral - Indoneisa
- Commonwealth Bank - Australia
- Bukit Baiduri Energy - Indonesia
- Standard Chartered Bank - UAE
- Holcim Trading Pte Ltd - Singapore
- IEA Clean Coal Centre - UK
- Aditya Birla Group - India
- Chamber of Mines of South Africa
- Altura Mining Limited, Indonesia
- Attock Cement Pakistan Limited
- Edison Trading Spa - Italy
- Bhoruka Overseas - Indonesia
- Simpson Spence & Young - Indonesia
- South Luzon Thermal Energy Corporation
- Pipit Mutiara Jaya. PT, Indonesia
- The State Trading Corporation of India Ltd
- Grasim Industreis Ltd - India
- Bhushan Steel Limited - India
- Formosa Plastics Group - Taiwan
- Coastal Gujarat Power Limited - India
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
- Bukit Makmur.PT - Indonesia
- The Treasury - Australian Government
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- Lanco Infratech Ltd - India
- San Jose City I Power Corp, Philippines
- Sojitz Corporation - Japan
- GVK Power & Infra Limited - India
- Directorate Of Revenue Intelligence - India
- GAC Shipping (India) Pvt Ltd
- Kaltim Prima Coal - Indonesia
- Port Waratah Coal Services - Australia
- Kartika Selabumi Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Borneo Indobara - Indonesia
- Cement Manufacturers Association - India
- Kobexindo Tractors - Indoneisa
- Metalloyd Limited - United Kingdom
- Medco Energi Mining Internasional
- Parry Sugars Refinery, India
- Ministry of Transport, Egypt
- Asmin Koalindo Tuhup - Indonesia
- Economic Council, Georgia
- Bahari Cakrawala Sebuku - Indonesia
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Posco Energy - South Korea
- Kumho Petrochemical, South Korea
- Africa Commodities Group - South Africa
- Meenaskhi Energy Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- VISA Power Limited - India
- Rio Tinto Coal - Australia
- Toyota Tsusho Corporation, Japan
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- Essar Steel Hazira Ltd - India
- Videocon Industries ltd - India
- Agrawal Coal Company - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- Manunggal Multi Energi - Indonesia
- Marubeni Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Merrill Lynch Commodities Europe
- Maharashtra Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Eastern Coal Council - USA
- Cigading International Bulk Terminal - Indonesia
- Meralco Power Generation, Philippines
- Oldendorff Carriers - Singapore
- Malabar Cements Ltd - India
- Thai Mozambique Logistica
- Indogreen Group - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement - Thailand
- Energy Development Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Larsen & Toubro Limited - India
- Wood Mackenzie - Singapore
- Indika Energy - Indonesia
- Eastern Energy - Thailand
- Interocean Group of Companies - India
- Therma Luzon, Inc, Philippines
- MS Steel International - UAE
- CIMB Investment Bank - Malaysia
- Uttam Galva Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- London Commodity Brokers - England
- Kapuas Tunggal Persada - Indonesia
- Binh Thuan Hamico - Vietnam
- Mercator Lines Limited - India
- Ministry of Finance - Indonesia
- Barasentosa Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- ICICI Bank Limited - India
- Orica Australia Pty. Ltd.
- Bharathi Cement Corporation - India
- McConnell Dowell - Australia
- Anglo American - United Kingdom
- Dalmia Cement Bharat India
- ASAPP Information Group - India
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vedanta Resources Plc - India
- TNB Fuel Sdn Bhd - Malaysia
- PNOC Exploration Corporation - Philippines
- Wilmar Investment Holdings
- Sindya Power Generating Company Private Ltd
- Billiton Holdings Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- Antam Resourcindo - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kalimantan Lumbung Energi - Indonesia
- Independent Power Producers Association of India
- White Energy Company Limited
- International Coal Ventures Pvt Ltd - India
- Planning Commission, India
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- LBH Netherlands Bv - Netherlands
- India Bulls Power Limited - India
- CNBM International Corporation - China
- Offshore Bulk Terminal Pte Ltd, Singapore
- GMR Energy Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining Corp, Philippines
- Price Waterhouse Coopers - Russia
- Thiess Contractors Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Vizag Seaport Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- SMG Consultants - Indonesia
- Parliament of New Zealand
- SMC Global Power, Philippines
- Aboitiz Power Corporation - Philippines
- Global Business Power Corporation, Philippines
- Ministry of Mines - Canada
- Krishnapatnam Port Company Ltd. - India
- Mercuria Energy - Indonesia
- Electricity Authority, New Zealand
- PowerSource Philippines DevCo
- Power Finance Corporation Ltd., India
- TeaM Sual Corporation - Philippines
- Madhucon Powers Ltd - India
- Siam City Cement PLC, Thailand
- Jorong Barutama Greston.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Bangladesh Power Developement Board
- Ind-Barath Power Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- Tamil Nadu electricity Board
- Latin American Coal - Colombia
- Carbofer General Trading SA - India
- Karaikal Port Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Trasteel International SA, Italy
- Indian Oil Corporation Limited
- Mjunction Services Limited - India
- Miang Besar Coal Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Gujarat Sidhee Cement - India
- Petrochimia International Co. Ltd.- Taiwan
- Coalindo Energy - Indonesia
- Deloitte Consulting - India
- Gujarat Mineral Development Corp Ltd - India
- Mintek Dendrill Indonesia
- Banpu Public Company Limited - Thailand
- Riau Bara Harum - Indonesia
- PTC India Limited - India
- Straits Asia Resources Limited - Singapore
- Samtan Co., Ltd - South Korea
- Central Electricity Authority - India
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