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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, 07 August 09
BALTIC DRY INDEX HAS WORST WEEK SINCE OCTOBER AS DEMAND SLOWS
Bloomberg reported that, The Baltic Dry Index, a measure of shipping costs for commodities, had its worst week since October as Chinese demand for s ...
Friday, 07 August 09
COAL-PRICE FORECAST RAISED AT MERRILL ON CHINA, INDIA DEMAND
Bloomberg reported that, Bank of America Corp.’s Merrill Lynch & Co. unit increased its price forecast for Asian power-station coal becaus ...
Friday, 07 August 09
CHINESE DEMAND FOR FOREIGN COAL SOARS
Mining Weekly reported that, Chinese coal imports rocketed by 126,3%, year-on-year, in the first half of this year, the country’s customs auth ...
Thursday, 06 August 09
RICHARDS BAY COAL SHIPMENTS FELL 3% ON YEAR IN JULY
Bloomberg reported that, Richards Bay Coal Terminal, Africa’s largest coal-export facility, exported 3 percent less of the fuel in July than i ...
Thursday, 06 August 09
NTPC LOOKS TO BYPASS STATE TRADING FIRMS ON COAL IMPORT
A reduced coal import bill for NTPC could lead to lower power tariffs
Live mint.com reported that, India’s largest power generation utility ...
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- Directorate Of Revenue Intelligence - India
- Bhushan Steel Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ind-Barath Power Infra Limited - India
- Energy Link Ltd, New Zealand
- Krishnapatnam Port Company Ltd. - India
- LBH Netherlands Bv - Netherlands
- Minerals Council of Australia
- Thiess Contractors Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Ambuja Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Tamil Nadu electricity Board
- Africa Commodities Group - South Africa
- Star Paper Mills Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- The University of Queensland
- Karbindo Abesyapradhi - Indoneisa
- Indian Energy Exchange, India
- Riau Bara Harum - Indonesia
- Attock Cement Pakistan Limited
- Sojitz Corporation - Japan
- Samtan Co., Ltd - South Korea
- Manunggal Multi Energi - Indonesia
- Siam City Cement - Thailand
- Trasteel International SA, Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- Timah Investasi Mineral - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Thai Mozambique Logistica
- Bhoruka Overseas - Indonesia
- Eastern Coal Council - USA
- Latin American Coal - Colombia
- Georgia Ports Authority, United States
- Siam City Cement PLC, Thailand
- PowerSource Philippines DevCo
- Ministry of Transport, Egypt
- Meralco Power Generation, Philippines
- Singapore Mercantile Exchange
- Kapuas Tunggal Persada - Indonesia
- PTC India Limited - India
- Chettinad Cement Corporation Ltd - India
- GMR Energy Limited - India
- Global Green Power PLC Corporation, Philippines
- MS Steel International - UAE
- Central Java Power - Indonesia
- Electricity Generating Authority of Thailand
- Billiton Holdings Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cement Manufacturers Association - India
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- Wilmar Investment Holdings
- Chamber of Mines of South Africa
- Commonwealth Bank - Australia
- Economic Council, Georgia
- International Coal Ventures Pvt Ltd - India
- White Energy Company Limited
- Planning Commission, India
- Romanian Commodities Exchange
- Essar Steel Hazira Ltd - India
- ASAPP Information Group - India
- Neyveli Lignite Corporation Ltd, - India
- Borneo Indobara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Malabar Cements Ltd - India
- Central Electricity Authority - India
- Gujarat Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Bukit Baiduri Energy - Indonesia
- Parry Sugars Refinery, India
- Mintek Dendrill Indonesia
- Bulk Trading Sa - Switzerland
- Australian Commodity Traders Exchange
- Eastern Energy - Thailand
- Port Waratah Coal Services - Australia
- Kideco Jaya Agung - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mjunction Services Limited - India
- Orica Australia Pty. Ltd.
- Kobexindo Tractors - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Intertek Mineral Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Larsen & Toubro Limited - India
- San Jose City I Power Corp, Philippines
- Videocon Industries ltd - India
- Edison Trading Spa - Italy
- Kaltim Prima Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Goldman Sachs - Singapore
- Coal and Oil Company - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- Kumho Petrochemical, South Korea
- Agrawal Coal Company - India
- OPG Power Generation Pvt Ltd - India
- Standard Chartered Bank - UAE
- Therma Luzon, Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Renaissance Capital - South Africa
- SN Aboitiz Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Gujarat Sidhee Cement - India
- Orica Mining Services - Indonesia
- Metalloyd Limited - United Kingdom
- Madhucon Powers Ltd - India
- Ministry of Mines - Canada
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Australian Coal Association
- Indogreen Group - Indonesia
- Sree Jayajothi Cements Limited - India
- Ceylon Electricity Board - Sri Lanka
- Marubeni Corporation - India
- Holcim Trading Pte Ltd - Singapore
- McConnell Dowell - Australia
- Kohat Cement Company Ltd. - Pakistan
- Mercator Lines Limited - India
- Pendopo Energi Batubara - Indonesia
- Toyota Tsusho Corporation, Japan
- Pipit Mutiara Jaya. PT, Indonesia
- Simpson Spence & Young - Indonesia
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- Global Business Power Corporation, Philippines
- Energy Development Corp, Philippines
- ICICI Bank Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Barasentosa Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- London Commodity Brokers - England
- Sakthi Sugars Limited - India
- AsiaOL BioFuels Corp., Philippines
- Makarim & Taira - Indonesia
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- Tata Chemicals Ltd - India
- Lanco Infratech Ltd - India
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- Coalindo Energy - Indonesia
- Ministry of Finance - Indonesia
- Power Finance Corporation Ltd., India
- Semirara Mining and Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Wood Mackenzie - Singapore
- The State Trading Corporation of India Ltd
- IHS Mccloskey Coal Group - USA
- Indo Tambangraya Megah - Indonesia
- Bukit Makmur.PT - Indonesia
- SMC Global Power, Philippines
- Vedanta Resources Plc - India
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- Independent Power Producers Association of India
- GAC Shipping (India) Pvt Ltd
- Uttam Galva Steels Limited - India
- Indonesian Coal Mining Association
- CNBM International Corporation - China
- Petron Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Bharathi Cement Corporation - India
- South Luzon Thermal Energy Corporation
- Gujarat Mineral Development Corp Ltd - India
- Parliament of New Zealand
- Meenaskhi Energy Private Limited - India
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- VISA Power Limited - India
- Heidelberg Cement - Germany
- CIMB Investment Bank - Malaysia
- Kepco SPC Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vizag Seaport Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Sarangani Energy Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Banpu Public Company Limited - Thailand
- Globalindo Alam Lestari - Indonesia
- Bhatia International Limited - India
- Cigading International Bulk Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Deloitte Consulting - India
- Electricity Authority, New Zealand
- Savvy Resources Ltd - HongKong
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- New Zealand Coal & Carbon
- IEA Clean Coal Centre - UK
- Rio Tinto Coal - Australia
- Aditya Birla Group - India
- Mercuria Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Salva Resources Pvt Ltd - India
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- GVK Power & Infra Limited - India
- Coastal Gujarat Power Limited - India
- Sical Logistics Limited - India
- Merrill Lynch Commodities Europe
- Alfred C Toepfer International GmbH - Germany
- The Treasury - Australian Government
- Indika Energy - Indonesia
- Anglo American - United Kingdom
- Posco Energy - South Korea
- India Bulls Power Limited - India
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