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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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Friday, 24 July 09
INDIA TAKES 9 MILLION TONNES S. AFRICAN COAL JAN - JUNE
Reuters reported that, India accounted for nearly 9 million tonnes of South Africa's January-June exports of around 28 million tonnes, industry sour ...
Thursday, 23 July 09
KOMIPO LAUNCHES TWO COAL TENDERS
Korea Midland Power on Wednesday launched two tenders to procure bituminous or semi-anthracite coal for August to September delivery. Bids close on J ...
Thursday, 23 July 09
GUANGDONG BUYERS SET TO IMPORT 2.3 MILLION MT FROM VIETNAM - MEDIA
Several coal-consuming companies in China’s Guangdong Province, headed by Guangdong Yudean Group (Guangdong Power Generation Group), have inke ...
Thursday, 23 July 09
KEPCO BUYS 1.5% STAKE IN ADARO ENERGY FOR US$ 56.5M
WSJ reported that, state-run utility Korea Electric Power Corp., or Kepco, Thursday said it has acquired a 1.5% stake in Indonesian coal miner, PT A ...
Thursday, 23 July 09
INDONESIA COAL-PRICES CLIMB TO $80, INDIAN DEMAND SLOWS
Reuters reported that, prices of power-station coal in Australia, a benchmark for Asia, jumped to nearly $80 a tonne this week, while Indonesi ...
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- Planning Commission, India
- Asmin Koalindo Tuhup - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Renaissance Capital - South Africa
- Wood Mackenzie - Singapore
- Australian Coal Association
- Wilmar Investment Holdings
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Barasentosa Lestari - Indonesia
- Larsen & Toubro Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Central Java Power - Indonesia
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- Sical Logistics Limited - India
- Gujarat Sidhee Cement - India
- Intertek Mineral Services - Indonesia
- Parry Sugars Refinery, India
- Jindal Steel & Power Ltd - India
- Sakthi Sugars Limited - India
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Bukit Baiduri Energy - Indonesia
- Minerals Council of Australia
- Agrawal Coal Company - India
- Salva Resources Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Therma Luzon, Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Trasteel International SA, Italy
- Tamil Nadu electricity Board
- Power Finance Corporation Ltd., India
- Edison Trading Spa - Italy
- Directorate Of Revenue Intelligence - India
- Kapuas Tunggal Persada - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Chettinad Cement Corporation Ltd - India
- Deloitte Consulting - India
- Orica Australia Pty. Ltd.
- Simpson Spence & Young - Indonesia
- Malabar Cements Ltd - India
- India Bulls Power Limited - India
- Aboitiz Power Corporation - Philippines
- Vedanta Resources Plc - India
- IEA Clean Coal Centre - UK
- Dalmia Cement Bharat India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sinarmas Energy and Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Merrill Lynch Commodities Europe
- IHS Mccloskey Coal Group - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kalimantan Lumbung Energi - Indonesia
- Global Business Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Chamber of Mines of South Africa
- The University of Queensland
- Global Coal Blending Company Limited - Australia
- Leighton Contractors Pty Ltd - Australia
- Romanian Commodities Exchange
- Alfred C Toepfer International GmbH - Germany
- Global Green Power PLC Corporation, Philippines
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- Ministry of Transport, Egypt
- Rio Tinto Coal - Australia
- Meralco Power Generation, Philippines
- Sree Jayajothi Cements Limited - India
- Energy Link Ltd, New Zealand
- Iligan Light & Power Inc, Philippines
- Kumho Petrochemical, South Korea
- Siam City Cement PLC, Thailand
- Bulk Trading Sa - Switzerland
- Eastern Coal Council - USA
- Metalloyd Limited - United Kingdom
- Latin American Coal - Colombia
- Thiess Contractors Indonesia
- White Energy Company Limited
- Parliament of New Zealand
- Madhucon Powers Ltd - India
- Petron Corporation, Philippines
- Independent Power Producers Association of India
- South Luzon Thermal Energy Corporation
- Indian Energy Exchange, India
- Port Waratah Coal Services - Australia
- Gujarat Mineral Development Corp Ltd - India
- Makarim & Taira - Indonesia
- Formosa Plastics Group - Taiwan
- TeaM Sual Corporation - Philippines
- Tata Chemicals Ltd - India
- Straits Asia Resources Limited - Singapore
- Bhoruka Overseas - Indonesia
- Carbofer General Trading SA - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Oil Corporation Limited
- Binh Thuan Hamico - Vietnam
- Bhatia International Limited - India
- Cigading International Bulk Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Coal and Oil Company - UAE
- Australian Commodity Traders Exchange
- Lanco Infratech Ltd - India
- Oldendorff Carriers - Singapore
- Medco Energi Mining Internasional
- Electricity Authority, New Zealand
- Interocean Group of Companies - India
- Singapore Mercantile Exchange
- VISA Power Limited - India
- Mercuria Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Semirara Mining Corp, Philippines
- Indika Energy - Indonesia
- SMC Global Power, Philippines
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Ind-Barath Power Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- International Coal Ventures Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- European Bulk Services B.V. - Netherlands
- The Treasury - Australian Government
- Marubeni Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- SN Aboitiz Power Inc, Philippines
- Baramulti Group, Indonesia
- GMR Energy Limited - India
- Timah Investasi Mineral - Indoneisa
- Goldman Sachs - Singapore
- Videocon Industries ltd - India
- ASAPP Information Group - India
- Mintek Dendrill Indonesia
- Vizag Seaport Private Limited - India
- Africa Commodities Group - South Africa
- Eastern Energy - Thailand
- Ambuja Cements Ltd - India
- Grasim Industreis Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Toyota Tsusho Corporation, Japan
- Central Electricity Authority - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- Indogreen Group - Indonesia
- Savvy Resources Ltd - HongKong
- Aditya Birla Group - India
- Bangladesh Power Developement Board
- London Commodity Brokers - England
- GVK Power & Infra Limited - India
- CIMB Investment Bank - Malaysia
- SMG Consultants - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Star Paper Mills Limited - India
- The State Trading Corporation of India Ltd
- Standard Chartered Bank - UAE
- PNOC Exploration Corporation - Philippines
- Siam City Cement - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Economic Council, Georgia
- Indonesian Coal Mining Association
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- CNBM International Corporation - China
- Uttam Galva Steels Limited - India
- ICICI Bank Limited - India
- Price Waterhouse Coopers - Russia
- Samtan Co., Ltd - South Korea
- Kideco Jaya Agung - Indonesia
- Posco Energy - South Korea
- Bhushan Steel Limited - India
- Essar Steel Hazira Ltd - India
- Coastal Gujarat Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Cement Manufacturers Association - India
- Xindia Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Borneo Indobara - Indonesia
- Altura Mining Limited, Indonesia
- PTC India Limited - India
- Commonwealth Bank - Australia
- Karaikal Port Pvt Ltd - India
- Coalindo Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Attock Cement Pakistan Limited
- Antam Resourcindo - Indonesia
- Anglo American - United Kingdom
- Kobexindo Tractors - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Heidelberg Cement - Germany
- Gujarat Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- Georgia Ports Authority, United States
- Bharathi Cement Corporation - India
- MS Steel International - UAE
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Ministry of Finance - Indonesia
- Energy Development Corp, Philippines
- Sojitz Corporation - Japan
- New Zealand Coal & Carbon
- PowerSource Philippines DevCo
- TNB Fuel Sdn Bhd - Malaysia
- Kaltim Prima Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Manunggal Multi Energi - Indonesia
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