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