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