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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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Tuesday, 28 July 09
SHENZHEN ENERGY INKS COAL PURCHASE CONTRACT WITH CHINA SHENHUA
China Knowledge reported that, Shenzhen Energy Group Co Ltd has signed a five-year contract with China Shenhua Energy Co Ltd, which is engaged in th ...
Tuesday, 28 July 09
BUKIT ASAM ENJOYS STRONG FIRST HALF
The Jakarta Post reported that, state coal miner PT Tambang Batubara Bukit Asam (PTBA) enjoyed a strong first half performance with six-month net pr ...
Tuesday, 28 July 09
NEWCASTLE LOADED 1.943 MILLION TONS OF COAL IN THE WEEK ENDED 27TH JULY 2009
COALspot.com (Singapore) : The volume exported from Australia’s Newcastle port in the week ended - 07:00 hours 27 July 2009 ...
Monday, 27 July 09
INDIA PAYING HIGHEST PRICE FOR S.AFRICA COAL - PRODUCERS
* Spread between South African and Pacific origin coal very wide
* Lack of European buying makes India indicator of value
Reuters reported that, ...
Monday, 27 July 09
TAIWAN'S FORMOSA EYES S.AFRICAN COAL FOR Q4: TRADE
Reuters reported that, Taiwan's Formosa Plastics Group is looking to buy two South African thermal coal cargoes for delivery in the fourth-quarter, ...
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- Independent Power Producers Association of India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vizag Seaport Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Chamber of Mines of South Africa
- Jindal Steel & Power Ltd - India
- International Coal Ventures Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Indika Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Essar Steel Hazira Ltd - India
- Jaiprakash Power Ventures ltd
- Global Green Power PLC Corporation, Philippines
- Marubeni Corporation - India
- Interocean Group of Companies - India
- OPG Power Generation Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Baramulti Group, Indonesia
- Sree Jayajothi Cements Limited - India
- Mercator Lines Limited - India
- The University of Queensland
- South Luzon Thermal Energy Corporation
- Bhushan Steel Limited - India
- ASAPP Information Group - India
- Straits Asia Resources Limited - Singapore
- New Zealand Coal & Carbon
- TeaM Sual Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Parliament of New Zealand
- Coalindo Energy - Indonesia
- Ministry of Transport, Egypt
- Kepco SPC Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Trasteel International SA, Italy
- Kumho Petrochemical, South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Borneo Indobara - Indonesia
- Ministry of Mines - Canada
- PTC India Limited - India
- Oldendorff Carriers - Singapore
- Banpu Public Company Limited - Thailand
- Formosa Plastics Group - Taiwan
- Agrawal Coal Company - India
- Global Coal Blending Company Limited - Australia
- Price Waterhouse Coopers - Russia
- Holcim Trading Pte Ltd - Singapore
- GAC Shipping (India) Pvt Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- MS Steel International - UAE
- Anglo American - United Kingdom
- CIMB Investment Bank - Malaysia
- Altura Mining Limited, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Heidelberg Cement - Germany
- PetroVietnam Power Coal Import and Supply Company
- Wilmar Investment Holdings
- Bulk Trading Sa - Switzerland
- McConnell Dowell - Australia
- PNOC Exploration Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Global Business Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Bangladesh Power Developement Board
- Lanco Infratech Ltd - India
- Mintek Dendrill Indonesia
- Semirara Mining and Power Corporation, Philippines
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- Indonesian Coal Mining Association
- Meralco Power Generation, Philippines
- Siam City Cement PLC, Thailand
- Ambuja Cements Ltd - India
- Semirara Mining Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Therma Luzon, Inc, Philippines
- Aditya Birla Group - India
- Salva Resources Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Malabar Cements Ltd - India
- Rio Tinto Coal - Australia
- Thiess Contractors Indonesia
- Xindia Steels Limited - India
- Wood Mackenzie - Singapore
- Commonwealth Bank - Australia
- Energy Link Ltd, New Zealand
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- Eastern Energy - Thailand
- Makarim & Taira - Indonesia
- Directorate Of Revenue Intelligence - India
- Ceylon Electricity Board - Sri Lanka
- Globalindo Alam Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Tamil Nadu electricity Board
- LBH Netherlands Bv - Netherlands
- Grasim Industreis Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement - Thailand
- Barasentosa Lestari - Indonesia
- Larsen & Toubro Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Simpson Spence & Young - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kobexindo Tractors - Indoneisa
- Cement Manufacturers Association - India
- The Treasury - Australian Government
- Power Finance Corporation Ltd., India
- Edison Trading Spa - Italy
- Kaltim Prima Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Planning Commission, India
- White Energy Company Limited
- Electricity Generating Authority of Thailand
- Central Electricity Authority - India
- Dalmia Cement Bharat India
- Neyveli Lignite Corporation Ltd, - India
- Toyota Tsusho Corporation, Japan
- Madhucon Powers Ltd - India
- Sical Logistics Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cigading International Bulk Terminal - Indonesia
- Vedanta Resources Plc - India
- Australian Coal Association
- Romanian Commodities Exchange
- Port Waratah Coal Services - Australia
- Electricity Authority, New Zealand
- Deloitte Consulting - India
- AsiaOL BioFuels Corp., Philippines
- ICICI Bank Limited - India
- Parry Sugars Refinery, India
- Indo Tambangraya Megah - Indonesia
- Australian Commodity Traders Exchange
- Gujarat Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sarangani Energy Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Posco Energy - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Meenaskhi Energy Private Limited - India
- Renaissance Capital - South Africa
- Mjunction Services Limited - India
- SMG Consultants - Indonesia
- Riau Bara Harum - Indonesia
- Gujarat Sidhee Cement - India
- Intertek Mineral Services - Indonesia
- Goldman Sachs - Singapore
- CNBM International Corporation - China
- Bhoruka Overseas - Indonesia
- Kartika Selabumi Mining - Indonesia
- Latin American Coal - Colombia
- Billiton Holdings Pty Ltd - Australia
- Energy Development Corp, Philippines
- Videocon Industries ltd - India
- Bharathi Cement Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Standard Chartered Bank - UAE
- Coastal Gujarat Power Limited - India
- India Bulls Power Limited - India
- Bhatia International Limited - India
- Attock Cement Pakistan Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Bayan Resources Tbk. - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Sinarmas Energy and Mining - Indonesia
- Georgia Ports Authority, United States
- Leighton Contractors Pty Ltd - Australia
- VISA Power Limited - India
- London Commodity Brokers - England
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
- Singapore Mercantile Exchange
- Africa Commodities Group - South Africa
- Star Paper Mills Limited - India
- Tata Chemicals Ltd - India
- Maheswari Brothers Coal Limited - India
- Metalloyd Limited - United Kingdom
- Minerals Council of Australia
- Miang Besar Coal Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Chettinad Cement Corporation Ltd - India
- Bukit Makmur.PT - Indonesia
- GVK Power & Infra Limited - India
- Economic Council, Georgia
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Ind-Barath Power Infra Limited - India
- Medco Energi Mining Internasional
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Merrill Lynch Commodities Europe
- Coal and Oil Company - UAE
- SMC Global Power, Philippines
- Indian Oil Corporation Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Indogreen Group - Indonesia
- Ministry of Finance - Indonesia
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
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