Hyderabad: Lanco Infratech Ltd (LITL) has pipped Reliance Power, NTPC and Jindal Steel & Power to win two super critical power projects in Uttar Pradesh totalling 3,300 mw in installed capacity through competitive bidding.
L Madhusudhan Rao, chairman, said the company will invest about Rs 14,000 crore on the two projects, which takes the total capacity under various stages of implementation by LITL to 13,000 mw. The company, which had suffered a major setback when it had to give up the Sasan ultra mega power project after bagging it, has since won several large coal-fired projects.
With the Prayagraj and Sangam projects, Uttar Pradesh becomes the biggest client-state for LITL. Including the 1,200 mw Anpara project, the total capacity won by it in the state is a whopping 4,500 mw.
Almost 90% of the power produced by the 1,980 mw Prayagraj project and the 1,320 mw Sangam project must be sold to the government of Uttar Pradesh, with LITL free to sell the remaining through the merchant market.
All linkages for the two projects, which will be implemented on a 80:20 debt:equity basis, will be provided by the state government.
These include road, water, fuel and rail linkages. LITL was the lowest bidder for the two projects with a quote of Rs 2.88 per unit for Prayagraj compared with Rs 2.94 from Reliance, Rs 3.44 from NTPC and Rs 3.591 from Jindal.
Likewise for the Sangam project, which had five contenders in the fray, the company quoted Rs 2.838 per unit compared with Rs 3.051 by Reliance, Rs 3.389 by CESE and Rs 3.51 by JSPL.
LITL will have to raise Rs 2,800 crore in equity over the next 54 months for the two projects, apart from the Rs 11,200 crore in debt over the next 12 months, DV Rao, joint managing director, LITL said. “Raising funds is not an issue considering there are ample avenues for which we will be structuring accordingly,” he added.
“LITL has made significant progress towards adding 7,000 mw generation capacity with about 3,400 mw of power generation capacity already under construction (having achieved financial closure),” Kotak Securities analyst Aman Batra said in an earlier report, setting a target price of Rs 670 per share with a value of Rs 331 per share from the power portfolio.
LITL has a good mix of PPAbased and merchant projects at 75:25 ration, which is a good mix of secure cash flows and marketbased upsides, which should accrue from the tightening power demand-supply situation in the country, Edelweiss Securities analysts Shankar K and Shashikiran Rao said in a report.
Showing posts with label Reliance Group. Show all posts
Showing posts with label Reliance Group. Show all posts
Sunday, August 17, 2008
RPower Get More Power
In an apparent attempt to compensate battered shareholders, Reliance Power Chairman Anil Ambani on Sunday announced that the Board has approved the issuance of bonus shares. The bonus shares will be issued to the investors in 3:5 ratio, Ambani announced. Ambani will lower his stake in the company in order to make up for the bonus shares. After this move his stake in the Reliance Power will go down to 40% from 45%.
The public stake in the company, after issuance of bonus shares will go upto, 15%. This move will protect dilution of REL stake in Reliance Power while promoters will accept dilution of their own stake. The move will also reduce cost of acquisition for shareholders.
After the issue of bonus shares the price of the Reliance Power ‘s share will go down to Rs 269 for retail investors and Rs 281 for institutional investors.
While announcing the move, Anil Ambani hinted at some foul play in the way the price of Reliance Power’s share fell to nearly Rs 380 from the listing price of Rs 540. He said the shares most likely plunged due to price hammering by an entity working against his company.
The public stake in the company, after issuance of bonus shares will go upto, 15%. This move will protect dilution of REL stake in Reliance Power while promoters will accept dilution of their own stake. The move will also reduce cost of acquisition for shareholders.
After the issue of bonus shares the price of the Reliance Power ‘s share will go down to Rs 269 for retail investors and Rs 281 for institutional investors.
While announcing the move, Anil Ambani hinted at some foul play in the way the price of Reliance Power’s share fell to nearly Rs 380 from the listing price of Rs 540. He said the shares most likely plunged due to price hammering by an entity working against his company.
RPower New Project Will Come Soon
The 300 mw Group Captive Power Project (GCPP) being set up by Vidarbha Industries Power (VIPL), a special purpose vehicle (SPV) formed by Reliance [Get Quote] Power, at Butibori near Nagpur in Maharashtra, will soon enter the construction phase. Sources said the required land has been acquired and the Maharashtra Pollution Control Board (MPCB) has given the green signal for setting up the project.
Reliance Power will soon award the engineering, procurement and construction (EPC) contract for the Rs 1500 crore (Rs 15 billion) project. The project is expected to take off by 2010, said sources. The BUTIBORI PROJECT is one of the first major power projects being set up in India under the GCPP concept. Power produced from the plant will be mainly supplied to the industrial consumers in Maharashtra at subsidised tariffs.
The project was awarded to Reliance Power by Maharashtra Industrial Development Corporation (MIDC), a nodal development agency of the Maharashtra government, through a competitive international bidding process. The project will be beneficial to the consumers and developers alike. Industrial consumers will get discounted tariff up to 25 paise a unit and developers will garner better returns as the tariff will be higher than long-term power purchase agreements (PPA), said sources.
Reliance Power has ensured coal linkage for the project from Western Coalfields. Maharashtra Industrial Development Corporation (MIDC) has allotted the land and committed adequate water from the Wadgaon dam near Nagpur. Other statutory approvals and environmental clearances are expected soon, said sources. Reliance Power is setting up 13 power projects with a combined capacity of 28,200 mw. This includes two ultra mega power projects of 4000 mw capacity at Sasan and Krishnapatinam.
Reliance Power will soon award the engineering, procurement and construction (EPC) contract for the Rs 1500 crore (Rs 15 billion) project. The project is expected to take off by 2010, said sources. The BUTIBORI PROJECT is one of the first major power projects being set up in India under the GCPP concept. Power produced from the plant will be mainly supplied to the industrial consumers in Maharashtra at subsidised tariffs.
The project was awarded to Reliance Power by Maharashtra Industrial Development Corporation (MIDC), a nodal development agency of the Maharashtra government, through a competitive international bidding process. The project will be beneficial to the consumers and developers alike. Industrial consumers will get discounted tariff up to 25 paise a unit and developers will garner better returns as the tariff will be higher than long-term power purchase agreements (PPA), said sources.
Reliance Power has ensured coal linkage for the project from Western Coalfields. Maharashtra Industrial Development Corporation (MIDC) has allotted the land and committed adequate water from the Wadgaon dam near Nagpur. Other statutory approvals and environmental clearances are expected soon, said sources. Reliance Power is setting up 13 power projects with a combined capacity of 28,200 mw. This includes two ultra mega power projects of 4000 mw capacity at Sasan and Krishnapatinam.
RPower Sets $200 bn
It is unprecedented, even if you call it plain euphoria. Nowhere in the world has an initial public offer of shares by a new company evoked as much response as the Reliance Power issue that closed on Friday. For a company that is yet to commence business or show income from operations, investors from across the world placed bids worth $200 billion for its shares worth $2.9 billion on offer. Retail investors put in 5.1 million applications for shares worth $47 billion or Rs 188,000 crore. Since as per rules, retail applicants can pay just a fourth of the total money initially, at least Rs 50,000 crore has been invested in the issue. For the sake of comparison, the collections are a fourth of the total direct tax collections for last year. The overwhelming response for the issue is based on expectations that Reliance Power will be able to complete its 13 power projects in the next couple of years. The sale will increase the wealth of Anil Ambani, already India's third richest man after his Reliance Energy quadrupled in value last year. His wealth more than tripled last year to $45 billion, according to Forbes magazine, behind elder brother Mukesh Ambani and Lakshmi Mittal. On listing of REPL, there is speculation that Anil may replace Mukesh as the richest Indian.
RPower Comes at for NIFTY:
Bears are gaining support from unexpected quarters. The Index Maintenance Sub-Committee of the National Stock Exchange has decided to replace Dr Reddy’s Laboratories with Reliance Power in Nifty. These changes will be effective from September 10, 2008. Experts say this will put further pressure on the Nifty as it will increase the market capitalisation of the index while net profit will decline, pushing-up the index price to earning (PE) multiple.
This will provide another excuse to bears to go short. Brokerages are now expected to bring down Sensex targets as the P/E ratio will go up. A P/E ratio is a valuation ratio and can be calculated by dividing the total market capitalisation of the index by its total earnings.
Besides making Nifty expensive, the move will further tilt the bias in the index towards the power-sector stocks. The index already has stocks such as NTPC (which has a weightage of 5.4% in the Nifty as on July 31) Tata Power (weightage of 1%), PowerGrid (1.5%) and Reliance Infra (0.9%), representing power utilities and stocks such as ABB (0.6%), BHEL (3.2%), Siemens (0.7%) and Suzlon (1.3%), representing power equipment manufacturers.
Reliance Power has a market capitalisation of close to Rs 37,000 crore and Dr Reddy’s Lab has a market cap of Rs 10,000 crore. Therefore, the inclusion of the new scrip in the index would raise the index market cap by around Rs 27,000 crore. Reliance Power reported a net profit of Rs 94 crore during FY08 compared with Rs 475 crore reported by Dr Reddy’s Lab during the same period.
In the first quarter ended June 2008, Reliance Power reported a net profit of Rs 59.7 crore on a total income of Rs 77.67 crore in Q1 June 2008. Comparable figures of the previous period were not available. Dr Reddy’s Lab reported a net profit of Rs 210 crore during the first quarter.
Market participants say this will lift the valuations of the index as its P/E ratio will go up by few basis points due to decrease in earning per share (EPS) of Nifty.
“The liquidity on the bourse is declining and fundamental factors are continuously unfavourable. These structural changes will add further pressure on the equity market,” says an analyst. The point to note is that Reliance Power will not be generating any profit from its core operations in the next few years to come. The profit so far generated is from treasury operations. Various institutions while valuing the market, consider these aspects.
Global investors in particular use key indices as a proxy to define a market as attractive or costly. The stocks for inclusion in Nifty have to satisfy several criteria such as liquidity (measured by impact cost), market capitalisation and floating stocks.
This will provide another excuse to bears to go short. Brokerages are now expected to bring down Sensex targets as the P/E ratio will go up. A P/E ratio is a valuation ratio and can be calculated by dividing the total market capitalisation of the index by its total earnings.
Besides making Nifty expensive, the move will further tilt the bias in the index towards the power-sector stocks. The index already has stocks such as NTPC (which has a weightage of 5.4% in the Nifty as on July 31) Tata Power (weightage of 1%), PowerGrid (1.5%) and Reliance Infra (0.9%), representing power utilities and stocks such as ABB (0.6%), BHEL (3.2%), Siemens (0.7%) and Suzlon (1.3%), representing power equipment manufacturers.
Reliance Power has a market capitalisation of close to Rs 37,000 crore and Dr Reddy’s Lab has a market cap of Rs 10,000 crore. Therefore, the inclusion of the new scrip in the index would raise the index market cap by around Rs 27,000 crore. Reliance Power reported a net profit of Rs 94 crore during FY08 compared with Rs 475 crore reported by Dr Reddy’s Lab during the same period.
In the first quarter ended June 2008, Reliance Power reported a net profit of Rs 59.7 crore on a total income of Rs 77.67 crore in Q1 June 2008. Comparable figures of the previous period were not available. Dr Reddy’s Lab reported a net profit of Rs 210 crore during the first quarter.
Market participants say this will lift the valuations of the index as its P/E ratio will go up by few basis points due to decrease in earning per share (EPS) of Nifty.
“The liquidity on the bourse is declining and fundamental factors are continuously unfavourable. These structural changes will add further pressure on the equity market,” says an analyst. The point to note is that Reliance Power will not be generating any profit from its core operations in the next few years to come. The profit so far generated is from treasury operations. Various institutions while valuing the market, consider these aspects.
Global investors in particular use key indices as a proxy to define a market as attractive or costly. The stocks for inclusion in Nifty have to satisfy several criteria such as liquidity (measured by impact cost), market capitalisation and floating stocks.
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