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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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Thursday, 30 July 09
KOMIPO OFFERED 3 MILLION MT IN TENDER, TEN TIMES OVERSUBSCRIBED
Korea Midland has received offers for 3 million mt of bituminous steam coal in its latest tender despite the power utility seeking only 300,000 mt, ...
Thursday, 30 July 09
PNOC FORGES JOINT VENTURES AS STEPS UP COAL OPERATIONS
The Philippine National Oil Co.-Exploration Corp. has entered joint venture agreements with food and beverage conglomerate San Miguel and Filipinas ...
Thursday, 30 July 09
NAMANE OF SOUTH AFRICA IN SUDAN COAL DEAL, BUSINESS REPORT SAYS
Namane of South Africa in Sudan Coal Deal, Business Report Says
Namane Resources Ltd. of South Africa signed a coal-supply agreement with the Nat ...
Wednesday, 29 July 09
RP COAL DEMAND TO SURGE BY 2014 - PHILIPPINES UPDATE
CEBU, Philippines - With the entry of new coal-fired power generation plants in the Philippines, the Department of Energy (DOE) projected an increas ...
Wednesday, 29 July 09
INDIA HUNGRY FOR OUR COKING COAL ASSETS
The Australian reported that, INDIA is about to embark on a program of rapid coal sector acquisitions in Australia as it looks to plug a huge annual ...
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- Banpu Public Company Limited - Thailand
- SMG Consultants - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Romanian Commodities Exchange
- Malabar Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Anglo American - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- GVK Power & Infra Limited - India
- Bhatia International Limited - India
- Australian Commodity Traders Exchange
- LBH Netherlands Bv - Netherlands
- Rio Tinto Coal - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- The Treasury - Australian Government
- IEA Clean Coal Centre - UK
- Cigading International Bulk Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Heidelberg Cement - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- Mintek Dendrill Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement PLC, Thailand
- Independent Power Producers Association of India
- Africa Commodities Group - South Africa
- Antam Resourcindo - Indonesia
- Thai Mozambique Logistica
- Carbofer General Trading SA - India
- European Bulk Services B.V. - Netherlands
- OPG Power Generation Pvt Ltd - India
- Ministry of Mines - Canada
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wood Mackenzie - Singapore
- Straits Asia Resources Limited - Singapore
- Mercator Lines Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maheswari Brothers Coal Limited - India
- Georgia Ports Authority, United States
- Minerals Council of Australia
- The State Trading Corporation of India Ltd
- GAC Shipping (India) Pvt Ltd
- Coastal Gujarat Power Limited - India
- Coal and Oil Company - UAE
- Sakthi Sugars Limited - India
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement - Thailand
- Global Coal Blending Company Limited - Australia
- Oldendorff Carriers - Singapore
- Karaikal Port Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- South Luzon Thermal Energy Corporation
- Madhucon Powers Ltd - India
- Riau Bara Harum - Indonesia
- Larsen & Toubro Limited - India
- Ambuja Cements Ltd - India
- London Commodity Brokers - England
- Kalimantan Lumbung Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- VISA Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Kobexindo Tractors - Indoneisa
- The University of Queensland
- Economic Council, Georgia
- Ministry of Transport, Egypt
- Indonesian Coal Mining Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Power Finance Corporation Ltd., India
- Star Paper Mills Limited - India
- Sojitz Corporation - Japan
- Electricity Generating Authority of Thailand
- Indian Oil Corporation Limited
- TeaM Sual Corporation - Philippines
- Coalindo Energy - Indonesia
- Meralco Power Generation, Philippines
- Price Waterhouse Coopers - Russia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cement Manufacturers Association - India
- Miang Besar Coal Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- Ind-Barath Power Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Parry Sugars Refinery, India
- Renaissance Capital - South Africa
- New Zealand Coal & Carbon
- AsiaOL BioFuels Corp., Philippines
- Sindya Power Generating Company Private Ltd
- Medco Energi Mining Internasional
- Bangladesh Power Developement Board
- Tamil Nadu electricity Board
- Semirara Mining Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Vedanta Resources Plc - India
- Orica Mining Services - Indonesia
- Kumho Petrochemical, South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Jaiprakash Power Ventures ltd
- Standard Chartered Bank - UAE
- PNOC Exploration Corporation - Philippines
- Borneo Indobara - Indonesia
- Energy Link Ltd, New Zealand
- Kartika Selabumi Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Essar Steel Hazira Ltd - India
- Makarim & Taira - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Tata Chemicals Ltd - India
- Central Java Power - Indonesia
- Port Waratah Coal Services - Australia
- Petron Corporation, Philippines
- Ministry of Finance - Indonesia
- Xindia Steels Limited - India
- Commonwealth Bank - Australia
- Wilmar Investment Holdings
- Billiton Holdings Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Meenaskhi Energy Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Sree Jayajothi Cements Limited - India
- Grasim Industreis Ltd - India
- Simpson Spence & Young - Indonesia
- IHS Mccloskey Coal Group - USA
- Mjunction Services Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Marubeni Corporation - India
- ASAPP Information Group - India
- Pendopo Energi Batubara - Indonesia
- Sical Logistics Limited - India
- Intertek Mineral Services - Indonesia
- Deloitte Consulting - India
- Directorate General of MIneral and Coal - Indonesia
- Edison Trading Spa - Italy
- Eastern Coal Council - USA
- Planning Commission, India
- Bulk Trading Sa - Switzerland
- Mercuria Energy - Indonesia
- GMR Energy Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Toyota Tsusho Corporation, Japan
- Manunggal Multi Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Baramulti Group, Indonesia
- Agrawal Coal Company - India
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Energy - Thailand
- Sarangani Energy Corporation, Philippines
- Central Electricity Authority - India
- Posco Energy - South Korea
- Energy Development Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Indika Energy - Indonesia
- Goldman Sachs - Singapore
- Trasteel International SA, Italy
- Chettinad Cement Corporation Ltd - India
- PowerSource Philippines DevCo
- Bayan Resources Tbk. - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bharathi Cement Corporation - India
- Kepco SPC Power Corporation, Philippines
- Latin American Coal - Colombia
- Bhoruka Overseas - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Samtan Co., Ltd - South Korea
- Dalmia Cement Bharat India
- MS Steel International - UAE
- Maharashtra Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Singapore Mercantile Exchange
- Australian Coal Association
- Globalindo Alam Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Kohat Cement Company Ltd. - Pakistan
- International Coal Ventures Pvt Ltd - India
- Indian Energy Exchange, India
- Bhushan Steel Limited - India
- Semirara Mining and Power Corporation, Philippines
- Indogreen Group - Indonesia
- Binh Thuan Hamico - Vietnam
- Indo Tambangraya Megah - Indonesia
- Altura Mining Limited, Indonesia
- White Energy Company Limited
- Global Business Power Corporation, Philippines
- ICICI Bank Limited - India
- Chamber of Mines of South Africa
- Ceylon Electricity Board - Sri Lanka
- CNBM International Corporation - China
- India Bulls Power Limited - India
- Attock Cement Pakistan Limited
- Aditya Birla Group - India
- Bukit Makmur.PT - Indonesia
- Parliament of New Zealand
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- Interocean Group of Companies - India
- San Jose City I Power Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Uttam Galva Steels Limited - India
- Vizag Seaport Private Limited - India
- Thiess Contractors Indonesia
- PTC India Limited - India
- Orica Australia Pty. Ltd.
- Electricity Authority, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- CIMB Investment Bank - Malaysia
- Rashtriya Ispat Nigam Limited - India
- Iligan Light & Power Inc, Philippines
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