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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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- The State Trading Corporation of India Ltd
- Standard Chartered Bank - UAE
- ICICI Bank Limited - India
- Alfred C Toepfer International GmbH - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Singapore Mercantile Exchange
- Electricity Generating Authority of Thailand
- Rio Tinto Coal - Australia
- Tamil Nadu electricity Board
- Dalmia Cement Bharat India
- Metalloyd Limited - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Star Paper Mills Limited - India
- Medco Energi Mining Internasional
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Meenaskhi Energy Private Limited - India
- Georgia Ports Authority, United States
- Pendopo Energi Batubara - Indonesia
- Chamber of Mines of South Africa
- Formosa Plastics Group - Taiwan
- Goldman Sachs - Singapore
- GVK Power & Infra Limited - India
- Madhucon Powers Ltd - India
- Malabar Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- LBH Netherlands Bv - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Toyota Tsusho Corporation, Japan
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Orica Mining Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Marubeni Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Ministry of Finance - Indonesia
- Barasentosa Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Ministry of Mines - Canada
- Interocean Group of Companies - India
- Mintek Dendrill Indonesia
- Kartika Selabumi Mining - Indonesia
- Global Business Power Corporation, Philippines
- Parliament of New Zealand
- Price Waterhouse Coopers - Russia
- Rashtriya Ispat Nigam Limited - India
- Altura Mining Limited, Indonesia
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- Vedanta Resources Plc - India
- Manunggal Multi Energi - Indonesia
- Independent Power Producers Association of India
- Straits Asia Resources Limited - Singapore
- Siam City Cement - Thailand
- India Bulls Power Limited - India
- Jindal Steel & Power Ltd - India
- Electricity Authority, New Zealand
- Indian Oil Corporation Limited
- Therma Luzon, Inc, Philippines
- Essar Steel Hazira Ltd - India
- Coastal Gujarat Power Limited - India
- Baramulti Group, Indonesia
- OPG Power Generation Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Agrawal Coal Company - India
- Cement Manufacturers Association - India
- Mercator Lines Limited - India
- Ambuja Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Mercuria Energy - Indonesia
- Aditya Birla Group - India
- Coalindo Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Petron Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- Bharathi Cement Corporation - India
- Intertek Mineral Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- ASAPP Information Group - India
- Karbindo Abesyapradhi - Indoneisa
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- Makarim & Taira - Indonesia
- Kaltim Prima Coal - Indonesia
- Central Java Power - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Timah Investasi Mineral - Indoneisa
- Posco Energy - South Korea
- Indika Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Wilmar Investment Holdings
- Bayan Resources Tbk. - Indonesia
- Commonwealth Bank - Australia
- Videocon Industries ltd - India
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
- Central Electricity Authority - India
- The University of Queensland
- Banpu Public Company Limited - Thailand
- Bangladesh Power Developement Board
- Asmin Koalindo Tuhup - Indonesia
- MS Steel International - UAE
- Samtan Co., Ltd - South Korea
- Global Green Power PLC Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- SN Aboitiz Power Inc, Philippines
- Lanco Infratech Ltd - India
- Larsen & Toubro Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining Corp, Philippines
- VISA Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- Miang Besar Coal Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Bhatia International Limited - India
- Indonesian Coal Mining Association
- Meralco Power Generation, Philippines
- Sakthi Sugars Limited - India
- Gujarat Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Attock Cement Pakistan Limited
- Power Finance Corporation Ltd., India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- Maheswari Brothers Coal Limited - India
- San Jose City I Power Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- SMG Consultants - Indonesia
- Siam City Cement PLC, Thailand
- PNOC Exploration Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Directorate Of Revenue Intelligence - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Minerals Council of Australia
- Thiess Contractors Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Mjunction Services Limited - India
- Trasteel International SA, Italy
- Sical Logistics Limited - India
- GMR Energy Limited - India
- Merrill Lynch Commodities Europe
- Kideco Jaya Agung - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Commodity Traders Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Latin American Coal - Colombia
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
- Bhushan Steel Limited - India
- Savvy Resources Ltd - HongKong
- Simpson Spence & Young - Indonesia
- Edison Trading Spa - Italy
- Heidelberg Cement - Germany
- Renaissance Capital - South Africa
- Economic Council, Georgia
- Jaiprakash Power Ventures ltd
- Borneo Indobara - Indonesia
- Orica Australia Pty. Ltd.
- The Treasury - Australian Government
- TeaM Sual Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Indian Energy Exchange, India
- Romanian Commodities Exchange
- Antam Resourcindo - Indonesia
- Bukit Makmur.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- PTC India Limited - India
- SMC Global Power, Philippines
- Xindia Steels Limited - India
- Gujarat Sidhee Cement - India
- PowerSource Philippines DevCo
- Thai Mozambique Logistica
- Aboitiz Power Corporation - Philippines
- McConnell Dowell - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Eastern Energy - Thailand
- Eastern Coal Council - USA
- Oldendorff Carriers - Singapore
- Kepco SPC Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- Kumho Petrochemical, South Korea
- Tata Chemicals Ltd - India
- Ministry of Transport, Egypt
- Parry Sugars Refinery, India
- White Energy Company Limited
- CNBM International Corporation - China
- Leighton Contractors Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- PetroVietnam Power Coal Import and Supply Company
- Australian Coal Association
- GN Power Mariveles Coal Plant, Philippines
- Iligan Light & Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Holcim Trading Pte Ltd - Singapore
- Grasim Industreis Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Sojitz Corporation - Japan
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