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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, 21 July 09
FIRST QUARTER COAL MARKET AND EURACOAL'S OUTLOOK FOR THE FUTURE
Euracoal reports that for the first time in many years, the world market for hard coal fell by some 8 % during the first quarter 2009. This latest E ...
Monday, 20 July 09
CHINAS COAL DEMAND, OUTPUT TO PICK UP IN H2 - GROUP 2
Financial24 reported that, China's coal demand is expected to gradually pick up in the second half of the year, and coal output will likely grow fa ...
Monday, 20 July 09
ADANI POWER LAUNCHES IPO, AIMS HIGHER CAPACITY
Economic Times reported that, Adani Power Ltd, a power project development company, promoted by Adani Enterprise went for an initial public offering ...
Monday, 20 July 09
BANPU'S SECOND-HALF PROFIT MAY DROP ON COAL PRICES
Bloomberg Reported that, Banpu Pcl, Thailand’s biggest coal producer, expects profit to decline in the second half from the first six months a ...
Monday, 20 July 09
CHINA COAL PRODUCES 52.7 MLN TONNES OF COAL IN 1H, UP 5.4 PCT
China Mining reported that, China Coal Energy Co., the country's second largest coal producer, said Saturday that it produced 52.67 million tonnes ...
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- SMG Consultants - Indonesia
- Chamber of Mines of South Africa
- Karaikal Port Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- OPG Power Generation Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Ministry of Finance - Indonesia
- Tamil Nadu electricity Board
- Vijayanagar Sugar Pvt Ltd - India
- Energy Development Corp, Philippines
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- CIMB Investment Bank - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Grasim Industreis Ltd - India
- Bayan Resources Tbk. - Indonesia
- Economic Council, Georgia
- Gujarat Mineral Development Corp Ltd - India
- Attock Cement Pakistan Limited
- Eastern Coal Council - USA
- Deloitte Consulting - India
- Aditya Birla Group - India
- Interocean Group of Companies - India
- Georgia Ports Authority, United States
- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Cigading International Bulk Terminal - Indonesia
- Lanco Infratech Ltd - India
- London Commodity Brokers - England
- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
- Global Business Power Corporation, Philippines
- Marubeni Corporation - India
- Larsen & Toubro Limited - India
- Australian Coal Association
- GAC Shipping (India) Pvt Ltd
- Altura Mining Limited, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Posco Energy - South Korea
- Coalindo Energy - Indonesia
- Mercuria Energy - Indonesia
- Energy Link Ltd, New Zealand
- Gujarat Sidhee Cement - India
- Straits Asia Resources Limited - Singapore
- Trasteel International SA, Italy
- Vedanta Resources Plc - India
- Orica Australia Pty. Ltd.
- Leighton Contractors Pty Ltd - Australia
- Central Java Power - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Binh Thuan Hamico - Vietnam
- European Bulk Services B.V. - Netherlands
- PNOC Exploration Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Uttam Galva Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Borneo Indobara - Indonesia
- Independent Power Producers Association of India
- Sree Jayajothi Cements Limited - India
- Heidelberg Cement - Germany
- Sindya Power Generating Company Private Ltd
- Semirara Mining and Power Corporation, Philippines
- Latin American Coal - Colombia
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- Sical Logistics Limited - India
- Wilmar Investment Holdings
- Rio Tinto Coal - Australia
- Power Finance Corporation Ltd., India
- Minerals Council of Australia
- LBH Netherlands Bv - Netherlands
- Makarim & Taira - Indonesia
- Medco Energi Mining Internasional
- McConnell Dowell - Australia
- Tata Chemicals Ltd - India
- GVK Power & Infra Limited - India
- Intertek Mineral Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Electricity Generating Authority of Thailand
- Bahari Cakrawala Sebuku - Indonesia
- International Coal Ventures Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Merrill Lynch Commodities Europe
- Simpson Spence & Young - Indonesia
- Jaiprakash Power Ventures ltd
- ICICI Bank Limited - India
- Indogreen Group - Indonesia
- Ind-Barath Power Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Renaissance Capital - South Africa
- Bukit Makmur.PT - Indonesia
- Indian Energy Exchange, India
- Kalimantan Lumbung Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Savvy Resources Ltd - HongKong
- Sinarmas Energy and Mining - Indonesia
- Kumho Petrochemical, South Korea
- Carbofer General Trading SA - India
- Meralco Power Generation, Philippines
- Central Electricity Authority - India
- PetroVietnam Power Coal Import and Supply Company
- Chettinad Cement Corporation Ltd - India
- Global Coal Blending Company Limited - Australia
- Bangladesh Power Developement Board
- New Zealand Coal & Carbon
- Standard Chartered Bank - UAE
- Parliament of New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- CNBM International Corporation - China
- Singapore Mercantile Exchange
- Port Waratah Coal Services - Australia
- The State Trading Corporation of India Ltd
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Madhucon Powers Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Romanian Commodities Exchange
- Commonwealth Bank - Australia
- Mjunction Services Limited - India
- PTC India Limited - India
- Ministry of Transport, Egypt
- PowerSource Philippines DevCo
- Kepco SPC Power Corporation, Philippines
- Dalmia Cement Bharat India
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thai Mozambique Logistica
- Meenaskhi Energy Private Limited - India
- Sakthi Sugars Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Salva Resources Pvt Ltd - India
- Africa Commodities Group - South Africa
- Cement Manufacturers Association - India
- Anglo American - United Kingdom
- Bhatia International Limited - India
- MS Steel International - UAE
- White Energy Company Limited
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Riau Bara Harum - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Directorate General of MIneral and Coal - Indonesia
- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
- Therma Luzon, Inc, Philippines
- Xindia Steels Limited - India
- Star Paper Mills Limited - India
- Indonesian Coal Mining Association
- Kideco Jaya Agung - Indonesia
- Metalloyd Limited - United Kingdom
- Petron Corporation, Philippines
- Bulk Trading Sa - Switzerland
- VISA Power Limited - India
- Planning Commission, India
- Bukit Baiduri Energy - Indonesia
- Indika Energy - Indonesia
- Eastern Energy - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Bhushan Steel Limited - India
- Global Green Power PLC Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- Indo Tambangraya Megah - Indonesia
- Mercator Lines Limited - India
- Baramulti Group, Indonesia
- Semirara Mining Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Parry Sugars Refinery, India
- Kapuas Tunggal Persada - Indonesia
- Electricity Authority, New Zealand
- ASAPP Information Group - India
- SMC Global Power, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Rashtriya Ispat Nigam Limited - India
- Jindal Steel & Power Ltd - India
- Sojitz Corporation - Japan
- Globalindo Alam Lestari - Indonesia
- Australian Commodity Traders Exchange
- Antam Resourcindo - Indonesia
- The University of Queensland
- San Jose City I Power Corp, Philippines
- IEA Clean Coal Centre - UK
- Kohat Cement Company Ltd. - Pakistan
- Bhoruka Overseas - Indonesia
- Agrawal Coal Company - India
- Ministry of Mines - Canada
- TeaM Sual Corporation - Philippines
- Orica Mining Services - Indonesia
- Vizag Seaport Private Limited - India
- Toyota Tsusho Corporation, Japan
- Oldendorff Carriers - Singapore
- Maheswari Brothers Coal Limited - India
- IHS Mccloskey Coal Group - USA
- The Treasury - Australian Government
- Wood Mackenzie - Singapore
- Timah Investasi Mineral - Indoneisa
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