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