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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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Monday, 27 July 09
MIDDLE EAST COAL TO MOVE ON $1B EAST KALIMANTAN PROJECT
The Jakarta globe reported that, Middle East Coal reiterated on Monday that it would push ahead its $1 billion development program for East Kutai Re ...
Monday, 27 July 09
SHORT AND ONE YEAR PERIOD RATES FOR SUPRAMAX WAS FIRM AT AROUND US$ 18, 000 -18,500 PER DAY
COALspot.com (Singapore): The Supramax charter rates up sharply last week (ended 24th July 2009), especially India / Far East region said, Capt ...
Monday, 27 July 09
COKING COAL, IRON-ORE LIKELY TO BENEFIT NON-INTEGRATED STEEL PRODUCERS
Economictimes reported that, The second half of the financial year 2008-09 was one of the toughest periods for steel companies, especially the non-i ...
Monday, 27 July 09
GMR ENERGY BUYS EMCO POWERGEN SUBSIDIARY
DNA India reported that, Thane-based transformer manufacturer Emco Ltd has sold its stake in unlisted power generation subsidiary Emco Energy to Ban ...
Sunday, 26 July 09
CESC PLANS 2000 MW POWER PLANT IN BIHAR
Jai Bihar reported that, RPG flagship company CESC Ltd on Friday unveiled its plan to set up a 2,000 MW power generation plant at Pirpainti near Bha ...
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- Essar Steel Hazira Ltd - India
- Xindia Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Ministry of Transport, Egypt
- GMR Energy Limited - India
- Holcim Trading Pte Ltd - Singapore
- Directorate Of Revenue Intelligence - India
- Port Waratah Coal Services - Australia
- Kartika Selabumi Mining - Indonesia
- Indika Energy - Indonesia
- PowerSource Philippines DevCo
- Chamber of Mines of South Africa
- Electricity Generating Authority of Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Latin American Coal - Colombia
- Madhucon Powers Ltd - India
- Anglo American - United Kingdom
- Eastern Energy - Thailand
- Kapuas Tunggal Persada - Indonesia
- PTC India Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Tamil Nadu electricity Board
- Leighton Contractors Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- IHS Mccloskey Coal Group - USA
- SMC Global Power, Philippines
- Planning Commission, India
- Indogreen Group - Indonesia
- Star Paper Mills Limited - India
- Miang Besar Coal Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Meralco Power Generation, Philippines
- Romanian Commodities Exchange
- International Coal Ventures Pvt Ltd - India
- Central Java Power - Indonesia
- Toyota Tsusho Corporation, Japan
- Sarangani Energy Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Baramulti Group, Indonesia
- Samtan Co., Ltd - South Korea
- Malabar Cements Ltd - India
- Thai Mozambique Logistica
- PNOC Exploration Corporation - Philippines
- Merrill Lynch Commodities Europe
- Minerals Council of Australia
- London Commodity Brokers - England
- Savvy Resources Ltd - HongKong
- Bharathi Cement Corporation - India
- New Zealand Coal & Carbon
- Bukit Makmur.PT - Indonesia
- Gujarat Sidhee Cement - India
- Siam City Cement PLC, Thailand
- Sree Jayajothi Cements Limited - India
- Renaissance Capital - South Africa
- Ambuja Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Parry Sugars Refinery, India
- Orica Mining Services - Indonesia
- South Luzon Thermal Energy Corporation
- Economic Council, Georgia
- Straits Asia Resources Limited - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Ministry of Mines - Canada
- TeaM Sual Corporation - Philippines
- ASAPP Information Group - India
- Timah Investasi Mineral - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Sakthi Sugars Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Georgia Ports Authority, United States
- European Bulk Services B.V. - Netherlands
- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- Oldendorff Carriers - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Authority, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Jindal Steel & Power Ltd - India
- Dalmia Cement Bharat India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wilmar Investment Holdings
- Sical Logistics Limited - India
- Edison Trading Spa - Italy
- Posco Energy - South Korea
- Chettinad Cement Corporation Ltd - India
- CIMB Investment Bank - Malaysia
- Global Coal Blending Company Limited - Australia
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
- Lanco Infratech Ltd - India
- Energy Development Corp, Philippines
- Riau Bara Harum - Indonesia
- Rio Tinto Coal - Australia
- Siam City Cement - Thailand
- Indonesian Coal Mining Association
- Therma Luzon, Inc, Philippines
- Parliament of New Zealand
- LBH Netherlands Bv - Netherlands
- Agrawal Coal Company - India
- Bhoruka Overseas - Indonesia
- White Energy Company Limited
- Kideco Jaya Agung - Indonesia
- Ministry of Finance - Indonesia
- Grasim Industreis Ltd - India
- Tata Chemicals Ltd - India
- Kepco SPC Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Bangladesh Power Developement Board
- Carbofer General Trading SA - India
- The University of Queensland
- Bukit Asam (Persero) Tbk - Indonesia
- Coal and Oil Company - UAE
- OPG Power Generation Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Commonwealth Bank - Australia
- Wood Mackenzie - Singapore
- Marubeni Corporation - India
- Cement Manufacturers Association - India
- Power Finance Corporation Ltd., India
- SMG Consultants - Indonesia
- Kobexindo Tractors - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- CNBM International Corporation - China
- Petrochimia International Co. Ltd.- Taiwan
- Interocean Group of Companies - India
- TNB Fuel Sdn Bhd - Malaysia
- ICICI Bank Limited - India
- Globalindo Alam Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Ind-Barath Power Infra Limited - India
- Vedanta Resources Plc - India
- Orica Australia Pty. Ltd.
- Sinarmas Energy and Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Attock Cement Pakistan Limited
- Binh Thuan Hamico - Vietnam
- Barasentosa Lestari - Indonesia
- Medco Energi Mining Internasional
- Mercuria Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thiess Contractors Indonesia
- Maheswari Brothers Coal Limited - India
- Krishnapatnam Port Company Ltd. - India
- Eastern Coal Council - USA
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- Billiton Holdings Pty Ltd - Australia
- Petron Corporation, Philippines
- The State Trading Corporation of India Ltd
- Kaltim Prima Coal - Indonesia
- Sojitz Corporation - Japan
- Intertek Mineral Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Mercator Lines Limited - India
- Heidelberg Cement - Germany
- Kumho Petrochemical, South Korea
- India Bulls Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Australian Commodity Traders Exchange
- Metalloyd Limited - United Kingdom
- Uttam Galva Steels Limited - India
- Larsen & Toubro Limited - India
- Altura Mining Limited, Indonesia
- Antam Resourcindo - Indonesia
- Semirara Mining Corp, Philippines
- Simpson Spence & Young - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Goldman Sachs - Singapore
- Vizag Seaport Private Limited - India
- Deloitte Consulting - India
- The Treasury - Australian Government
- Meenaskhi Energy Private Limited - India
- Aditya Birla Group - India
- IEA Clean Coal Centre - UK
- Bahari Cakrawala Sebuku - Indonesia
- Energy Link Ltd, New Zealand
- MS Steel International - UAE
- Banpu Public Company Limited - Thailand
- Trasteel International SA, Italy
- McConnell Dowell - Australia
- Indian Oil Corporation Limited
- Bhatia International Limited - India
- Alfred C Toepfer International GmbH - Germany
- Makarim & Taira - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Borneo Indobara - Indonesia
- Standard Chartered Bank - UAE
- Australian Coal Association
- San Jose City I Power Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Bhushan Steel Limited - India
- Central Electricity Authority - India
- Aboitiz Power Corporation - Philippines
- VISA Power Limited - India
- Indian Energy Exchange, India
- Kohat Cement Company Ltd. - Pakistan
- Mjunction Services Limited - India
- Gujarat Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coalindo Energy - Indonesia
- GVK Power & Infra Limited - India
- Videocon Industries ltd - India
- Bayan Resources Tbk. - Indonesia
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