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