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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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Wednesday, 05 August 09
SMALLER DRY BULK CARRIERS TO FARE BETTER UNTIL THE END OF 2009 - SHIPPING
Marcor Shipping reported that, Smaller ship types are expected to outtake larger ones in dry bulk trade for the period until the end of the year. Th ...
Wednesday, 05 August 09
PEOPLE'S MINING SHOULD BE REGULATED UNDER RPP MINERBA
The Indonesian Institute of Science (LIPI) has called on the government to include a specific provision for people’s mining in the draft govern ...
Tuesday, 04 August 09
SRI LANKA IS LOOKING FOR 650,000 TON OF COAL NEXT YEAR FOR ITS FIRST 900 MW POWER PLANT.
COALspot.com ( Sri Lanka) : Lanka Coal Company Limited was issued a tender on 23 July 2009 to purchase 650,000 +/- 20% MT Bituminous Coal per a ...
Monday, 03 August 09
ONE YEAR CHARTER RATES FOR SUPRAMAX WAS AT AROUND USD 18,500 - VISTAAR SINGAPORE
COALspot.com (Singapore) : The freight market was flat this week with hardly any change in the BDI.The cape was up by about 4 pct and closed at 5,38 ...
Saturday, 01 August 09
APGENCO SAYS BOUGHT 500,000T MALAYSIAN COAL
The Malaysian Insider reported that, Indian state utility Andhra Pradesh Power Generation Corporation Ltd (Apgenco) has bought 500,000 tonnes of Mal ...
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- Toyota Tsusho Corporation, Japan
- Eastern Energy - Thailand
- Mercuria Energy - Indonesia
- Dalmia Cement Bharat India
- Central Java Power - Indonesia
- Carbofer General Trading SA - India
- Kideco Jaya Agung - Indonesia
- Gujarat Sidhee Cement - India
- Maheswari Brothers Coal Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Thai Mozambique Logistica
- VISA Power Limited - India
- New Zealand Coal & Carbon
- Vizag Seaport Private Limited - India
- Romanian Commodities Exchange
- Independent Power Producers Association of India
- Medco Energi Mining Internasional
- AsiaOL BioFuels Corp., Philippines
- Minerals Council of Australia
- Sojitz Corporation - Japan
- Australian Coal Association
- Timah Investasi Mineral - Indoneisa
- Attock Cement Pakistan Limited
- Parliament of New Zealand
- Eastern Coal Council - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sical Logistics Limited - India
- European Bulk Services B.V. - Netherlands
- Riau Bara Harum - Indonesia
- Star Paper Mills Limited - India
- McConnell Dowell - Australia
- Indogreen Group - Indonesia
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- Africa Commodities Group - South Africa
- Kumho Petrochemical, South Korea
- ASAPP Information Group - India
- Indian Oil Corporation Limited
- Electricity Authority, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Intertek Mineral Services - Indonesia
- Madhucon Powers Ltd - India
- Formosa Plastics Group - Taiwan
- Meralco Power Generation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- CIMB Investment Bank - Malaysia
- Heidelberg Cement - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Orica Australia Pty. Ltd.
- Gujarat Mineral Development Corp Ltd - India
- Australian Commodity Traders Exchange
- Singapore Mercantile Exchange
- Global Business Power Corporation, Philippines
- Bhushan Steel Limited - India
- Larsen & Toubro Limited - India
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Jindal Steel & Power Ltd - India
- The Treasury - Australian Government
- Malabar Cements Ltd - India
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- Semirara Mining Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Parry Sugars Refinery, India
- Rashtriya Ispat Nigam Limited - India
- Rio Tinto Coal - Australia
- Antam Resourcindo - Indonesia
- Port Waratah Coal Services - Australia
- Gujarat Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Indian Energy Exchange, India
- Orica Mining Services - Indonesia
- MS Steel International - UAE
- Essar Steel Hazira Ltd - India
- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- Videocon Industries ltd - India
- Power Finance Corporation Ltd., India
- Posco Energy - South Korea
- Alfred C Toepfer International GmbH - Germany
- Jaiprakash Power Ventures ltd
- Directorate Of Revenue Intelligence - India
- Manunggal Multi Energi - Indonesia
- The University of Queensland
- Borneo Indobara - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bhoruka Overseas - Indonesia
- Indika Energy - Indonesia
- Coalindo Energy - Indonesia
- Bangladesh Power Developement Board
- London Commodity Brokers - England
- Renaissance Capital - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Altura Mining Limited, Indonesia
- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Commonwealth Bank - Australia
- IHS Mccloskey Coal Group - USA
- Indo Tambangraya Megah - Indonesia
- Ambuja Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Goldman Sachs - Singapore
- Merrill Lynch Commodities Europe
- San Jose City I Power Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cigading International Bulk Terminal - Indonesia
- IEA Clean Coal Centre - UK
- OPG Power Generation Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thiess Contractors Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- SMC Global Power, Philippines
- Bharathi Cement Corporation - India
- Price Waterhouse Coopers - Russia
- GVK Power & Infra Limited - India
- Siam City Cement - Thailand
- Petron Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- Karbindo Abesyapradhi - Indoneisa
- Mjunction Services Limited - India
- Aboitiz Power Corporation - Philippines
- Bhatia International Limited - India
- Baramulti Group, Indonesia
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- Vedanta Resources Plc - India
- Latin American Coal - Colombia
- Edison Trading Spa - Italy
- Ministry of Finance - Indonesia
- Ministry of Mines - Canada
- Bukit Asam (Persero) Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Interocean Group of Companies - India
- Lanco Infratech Ltd - India
- Wilmar Investment Holdings
- Kohat Cement Company Ltd. - Pakistan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- PowerSource Philippines DevCo
- Ceylon Electricity Board - Sri Lanka
- GMR Energy Limited - India
- Central Electricity Authority - India
- Salva Resources Pvt Ltd - India
- Marubeni Corporation - India
- Coal and Oil Company - UAE
- India Bulls Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- Mintek Dendrill Indonesia
- Grasim Industreis Ltd - India
- Sarangani Energy Corporation, Philippines
- Sakthi Sugars Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Barasentosa Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- Coastal Gujarat Power Limited - India
- Bulk Trading Sa - Switzerland
- PTC India Limited - India
- Anglo American - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercator Lines Limited - India
- SN Aboitiz Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- CNBM International Corporation - China
- Sinarmas Energy and Mining - Indonesia
- The State Trading Corporation of India Ltd
- Tata Chemicals Ltd - India
- Straits Asia Resources Limited - Singapore
- Economic Council, Georgia
- Electricity Generating Authority of Thailand
- Chamber of Mines of South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Trasteel International SA, Italy
- Tamil Nadu electricity Board
- Cement Manufacturers Association - India
- Meenaskhi Energy Private Limited - India
- Banpu Public Company Limited - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Savvy Resources Ltd - HongKong
- TNB Fuel Sdn Bhd - Malaysia
- Uttam Galva Steels Limited - India
- Planning Commission, India
- Kobexindo Tractors - Indoneisa
- Siam City Cement PLC, Thailand
- Simpson Spence & Young - Indonesia
- Energy Link Ltd, New Zealand
- Ministry of Transport, Egypt
- Global Green Power PLC Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- White Energy Company Limited
- Energy Development Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Agrawal Coal Company - India
- Global Coal Blending Company Limited - Australia
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