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