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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, 30 July 09
KOMIPO OFFERED 3 MILLION MT IN TENDER, TEN TIMES OVERSUBSCRIBED
Korea Midland has received offers for 3 million mt of bituminous steam coal in its latest tender despite the power utility seeking only 300,000 mt, ...
Thursday, 30 July 09
PNOC FORGES JOINT VENTURES AS STEPS UP COAL OPERATIONS
The Philippine National Oil Co.-Exploration Corp. has entered joint venture agreements with food and beverage conglomerate San Miguel and Filipinas ...
Thursday, 30 July 09
NAMANE OF SOUTH AFRICA IN SUDAN COAL DEAL, BUSINESS REPORT SAYS
Namane of South Africa in Sudan Coal Deal, Business Report Says
Namane Resources Ltd. of South Africa signed a coal-supply agreement with the Nat ...
Wednesday, 29 July 09
RP COAL DEMAND TO SURGE BY 2014 - PHILIPPINES UPDATE
CEBU, Philippines - With the entry of new coal-fired power generation plants in the Philippines, the Department of Energy (DOE) projected an increas ...
Wednesday, 29 July 09
INDIA HUNGRY FOR OUR COKING COAL ASSETS
The Australian reported that, INDIA is about to embark on a program of rapid coal sector acquisitions in Australia as it looks to plug a huge annual ...
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- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- Central Electricity Authority - India
- Edison Trading Spa - Italy
- Orica Australia Pty. Ltd.
- PowerSource Philippines DevCo
- Merrill Lynch Commodities Europe
- AsiaOL BioFuels Corp., Philippines
- CIMB Investment Bank - Malaysia
- SN Aboitiz Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Coal and Oil Company - UAE
- VISA Power Limited - India
- Renaissance Capital - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Transport, Egypt
- The University of Queensland
- Sakthi Sugars Limited - India
- Grasim Industreis Ltd - India
- Indonesian Coal Mining Association
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
- Economic Council, Georgia
- Planning Commission, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- New Zealand Coal & Carbon
- Offshore Bulk Terminal Pte Ltd, Singapore
- Marubeni Corporation - India
- Barasentosa Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Kapuas Tunggal Persada - Indonesia
- Parry Sugars Refinery, India
- Romanian Commodities Exchange
- Thiess Contractors Indonesia
- Cement Manufacturers Association - India
- Oldendorff Carriers - Singapore
- Posco Energy - South Korea
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- Toyota Tsusho Corporation, Japan
- Siam City Cement - Thailand
- GVK Power & Infra Limited - India
- Gujarat Sidhee Cement - India
- Vedanta Resources Plc - India
- Pendopo Energi Batubara - Indonesia
- European Bulk Services B.V. - Netherlands
- Intertek Mineral Services - Indonesia
- San Jose City I Power Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Mercuria Energy - Indonesia
- Global Business Power Corporation, Philippines
- Medco Energi Mining Internasional
- IEA Clean Coal Centre - UK
- PTC India Limited - India
- Eastern Energy - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Bhatia International Limited - India
- Global Green Power PLC Corporation, Philippines
- Sojitz Corporation - Japan
- Ceylon Electricity Board - Sri Lanka
- Borneo Indobara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- IHS Mccloskey Coal Group - USA
- Salva Resources Pvt Ltd - India
- CNBM International Corporation - China
- Georgia Ports Authority, United States
- Sical Logistics Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- Lanco Infratech Ltd - India
- Sindya Power Generating Company Private Ltd
- Karbindo Abesyapradhi - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Karaikal Port Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Latin American Coal - Colombia
- ASAPP Information Group - India
- Mercator Lines Limited - India
- Neyveli Lignite Corporation Ltd, - India
- LBH Netherlands Bv - Netherlands
- Manunggal Multi Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Baramulti Group, Indonesia
- Tata Chemicals Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Essar Steel Hazira Ltd - India
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- Jindal Steel & Power Ltd - India
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Trasteel International SA, Italy
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- Bharathi Cement Corporation - India
- Deloitte Consulting - India
- Australian Commodity Traders Exchange
- Xindia Steels Limited - India
- Electricity Authority, New Zealand
- Ambuja Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Larsen & Toubro Limited - India
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Mjunction Services Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- OPG Power Generation Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Heidelberg Cement - Germany
- Uttam Galva Steels Limited - India
- PNOC Exploration Corporation - Philippines
- MS Steel International - UAE
- Wilmar Investment Holdings
- Ministry of Mines - Canada
- Videocon Industries ltd - India
- Star Paper Mills Limited - India
- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- Gujarat Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- The Treasury - Australian Government
- Directorate Of Revenue Intelligence - India
- Bukit Baiduri Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Chamber of Mines of South Africa
- Australian Coal Association
- Indian Oil Corporation Limited
- Leighton Contractors Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Singapore Mercantile Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Finance - Indonesia
- Petron Corporation, Philippines
- Semirara Mining Corp, Philippines
- Tamil Nadu electricity Board
- Power Finance Corporation Ltd., India
- Energy Link Ltd, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Africa Commodities Group - South Africa
- Sinarmas Energy and Mining - Indonesia
- Attock Cement Pakistan Limited
- Electricity Generating Authority of Thailand
- GAC Shipping (India) Pvt Ltd
- Agrawal Coal Company - India
- Aboitiz Power Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Anglo American - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- White Energy Company Limited
- Dalmia Cement Bharat India
- London Commodity Brokers - England
- Rio Tinto Coal - Australia
- Siam City Cement PLC, Thailand
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Ind-Barath Power Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Wood Mackenzie - Singapore
- Therma Luzon, Inc, Philippines
- Price Waterhouse Coopers - Russia
- Vizag Seaport Private Limited - India
- Malabar Cements Ltd - India
- Indian Energy Exchange, India
- Makarim & Taira - Indonesia
- Kumho Petrochemical, South Korea
- Sree Jayajothi Cements Limited - India
- SMG Consultants - Indonesia
- The State Trading Corporation of India Ltd
- McConnell Dowell - Australia
- South Luzon Thermal Energy Corporation
- Global Coal Blending Company Limited - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Standard Chartered Bank - UAE
- Port Waratah Coal Services - Australia
- Parliament of New Zealand
- Madhucon Powers Ltd - India
- Goldman Sachs - Singapore
- India Bulls Power Limited - India
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- Metalloyd Limited - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Mineral Development Corp Ltd - India
- Commonwealth Bank - Australia
- Meralco Power Generation, Philippines
- Bhushan Steel Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Formosa Plastics Group - Taiwan
- Altura Mining Limited, Indonesia
- Bhoruka Overseas - Indonesia
- Globalindo Alam Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Independent Power Producers Association of India
- SMC Global Power, Philippines
- Simpson Spence & Young - Indonesia
- Indika Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- ICICI Bank Limited - India
- Indogreen Group - Indonesia
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