Jindal Steel & Power Ltd has posted a net profit after taxes, Minority Interest and Share of Profit / (loss) of Associates of Rs. 4520.70 mn for the quarter ended September 30, 2013 as compared to Rs. 8972.80 mn for the quarter ended September 30, 2012.
Total Income has increased from Rs. 47338.10 million for the quarter ended September 30, 2012 to Rs. 49687.10 mn for the quarter ended September 30, 2013.
Ushdev International Ltd (UIL), a leading corporate house engaged in the Trading of Metals and Generation of Power, has reported its Financial Performance for the second quarter and half year ended September 30, 2013.
Consolidated Total Sales for the quarter ended September 30, 2013 stood at Rs 2,796 crores, registering a jump of 47%, as compared to Rs 1,906 crores in the in the corresponding period previous year.
Consolidated Net Profit for Q2FY14 stood at Rs 44 crores, up by 112% as compared to Rs 20 crore in the corresponding period previous year.
For the half year ended September 30, 2013, the Company’s Consolidated Total Sales stood at Rs 4,841 crores, up by 38%, as compared to Rs 3,511 crores in the corresponding period previous year. Consolidated Net Profit for H1FY14 stood at Rs 74 crores, a rise of 65% as compared to Rs 45 crores in the corresponding period last year.
On the Standalone basis, Net Profit for Q2FY14 stood at Rs 16 crores, up by 15% as compared to Rs 14 crores in the corresponding period previous year.
The Board of Directors of the Company at its meeting held on October 29, 2013 has approved and taken on record the financial results of the Company for the quarter and half year ended September 30, 2013.
Commenting on the second quarter performance, Mr. Prateek Gupta, Vice-Chairman, Ushdev International Ltd, said, “The group has been consciously exploring new opportunities for business both in terms of product and geography. Quarterly performance is result of those efforts. ”
Earnings per share (EPS) for the H1FY14 stood at Rs 21.85.
Sembcorp Environment, subsidiary of Sembcorp Industries, is divesting its entire stake of 51% in Sembcorp Enviro (India) to partner Ramky International (Singapore) for $7.25 Mn, Straitstimes states. The move is line to streamline its businesses and sharpen its strategy for the Indian market.
Sembcorp Enviro (India) is a special purpose vehicle that owns a 51 per cent stake in SembRamky Environmental Management, a medical waste collection and treatment player in India.
The Singapore major SembCorp Industries had acquired a 51% stake in Medicare Incin Pvt Ltd, a wholly-owned subsidiary of the Ramky Group, Hyderabad, to enter the medical waste disposal business in India.
The JV company was called SembEnviroRamky, which suited Sembcorp’s expansion strategy in India as well as helping in internationalising its business at that time.
Ramky Enviro Engineers Ltd acquired the commercial cleaning, conservancy services, and car park management units from Sembcorp Environment Pte. Ltd in Singapore through its fully-owned subsidiary Ramky Cleantech Services Pte Ltd., in 2009.
Ramky is headquartered in Hyderabad with regional offices located at Delhi, Mumbai, Ahmedabad, Bangalore, Chennai, Bhopal and Kolkatta and over 50 project offices. It provides services in the areas of civil, environmental and waste management infrastructure.
Sembcorp is a provider of essential energy and water solutions to customers in Singapore, China, Vietnam, the United Kingdom, the UAE and Oman. The Group has total assets of over S$13 billion and employs over 9,000 employees.
Sembcorp Environment also has stakes in Singapore based SembWaste (100%), Sembcorp Tay Paper Recycling (60%) and Australia based SembSITA Australia (40%).
Recently , A unit of Sembcorp Industries, backed by investor Temasek, was planning to acquire a majority stake in NCC Power Project for R1500 Cr; In November 2009, Sembcorp through its wholly owned subsidiary Sembawang Shipyard had formed a JV with Kakinada Seaports Ltd to establish and operate a marine and offshore facility.; In 2006, the firm had sold Sembawang Engineers and Constructors Pte Ltd to Punj Lloyd Pte Ltd, an arm of Indian infrastructure firm Punj Lloyd in two tranches for a total of $25.33 million.
Pan Global Corp, a firm listed on the OTC exchange in the US, has entered into a stock purchase agreement with Regency Yamuna Energy Ltd (RYEL) to buy the outstanding shares and convertible debt of RYEL which is commissioning a 5.7 MW small-hydro project in northern India.
The acquisition, to be completed in multiple tranches, will involve a total investment of around Rs 41 crore ($6.6 million).
As part of the deal, Pan Asia Infratech, an arm of Pan Global Corp, has entered into an agreement with RYEL, Arun Sharma, a director and majority stockholder of RYEL and the remaining stockholders of RYEL on October 28, 2013 to buy their shares.
This acquisition aims to fund the completion of RYEL's hydro project in Badyar in Uttarakhand, having a valuation of Rs 67.11 crore.
It will also enable RYEL to restructure its outstanding secured bank credit facility worth Rs 28.36 crore with the State Bank of Patiala.
In the first round of closing of the transaction scheduled by this weekend, Pan Global will buy 2,758,621 shares for Rs 4 crore (approximately $655,738), constituting approximately 13.4 per cent of RYEL.
In the second closing, expected within two weeks after the project starts generating power, Pan Asia will purchase 8,127,094 shares from the existing shareholders representing a 38 per cent stake of the firm for Rs 11.8 crore.
Within four months of the second close it would purchase the balance shares and pick certain liabilities of RYEL and the promoters of the firm for Rs 24.75 crore.
Pan Asia has also purchased a debenture from RYEL for Rs 42 lakh (approximately $68,852), bearing interest at the rate of 15 per cent per year, maturing on October 18, 2014 and convertible into shares of RYEL at the rate of Rs 14.50 per share. This would take total investment to around Rs 41 crore.
Ninety-five per cent of RYEL’s small hydro power project is estimated to be completed and commercial operation is expected to start during the current quarter.
Small hydro power generation facilities are a fast-growing component of India’s electricity generation sector. These projects typically comprise hydropower plants less than 25 MW and are different from traditional large-scale hydropower because they have a significantly reduced environmental impact. Small- and mini-hydro facilities are typically ‘run-of-the-river’ power plants, which do not dam the water channel, thereby retaining a light environmental footprint on the channel hydrology and the surrounding terrain.
Pan Global, which was till recently a shell company incorporated in the US, is focused on developing and supporting renewable energy projects besides other cleantech ventures. The firm is backed by investment firm Brookstone Partners, as per a SEC disclosure.
Early this month it also entered into a 10-year lease agreement for a five-acre parcel of land in Punjab for establishing hydroponic greenhouse growing operation. Hydroponic systems can use as much as 90 per cent less water than conventional methods while increasing crop yields on a more regular production schedule.
Pan Global is led by Bharat Vasandani, who began his career at an Indian plastic manufacturing company Jyotika Industries. He later joined D’Essence Consulting based in Mumbai where he was part of a team that assisted private and public companies on business strategy and turnarounds. He later moved on to a similar role with TresVista Financial Services in Mumbai.
Lower power offtake by state distribution companies and depreciation of the rupee led to a 36% year-on-year fall in profit for JSW Energy in the September quarter.
The company on Monday reported a net profit of Rs 162 crore for the quarter. A healthy monsoon resulted in weak demand for power during the quarter. As a result, JSW Energy's plant load factor (PLF), or capacity utilisation , for the quarter dropped to 69.3% from 82% in the year-ago period.
In addition, the depreciation in rupee led to high fuel costs for the company. However, correction in international coal prices partially offset the foreign exchange loss. Overall, the company reported an exceptional loss of Rs 168 crore in the quarter to September because of depreciation in the rupee.
A positive for the investors is that the foreign exchange losses are unlikely to continue in future. During the quarter, the company completely hedged its foreign exchange exposure. While this may lead to higher operating costs, it would reduce earnings volatility in the coming quarters. Over the past few quarters, the company has been shifting its revenue mix towards long-term contracts.
As of September, the company sold 60% of its output through long-term contracts compared with 48% in the previous year.
The company intends to sell up to 80% of its power through long-term power purchase agreements . This augurs well for the company as merchant or shortterm power tariffs have been under pressure due to lower off take. State distribution companies, or discoms, have become disciplined in buying power post their restructuring.
In addition, the integration of southern grid may reduce merchant rates in south India, the company's key supply region. At present, the company has three operational power plants with a combined capacity of 3,140 MW.
In addition, it has started tendering construction for its 240 MW hydropower project. A healthy debt-to-equity ratio of 1.4 gives the company opportunity to expand its capacity through organic route or acquire distressed projects in the near future. Another development to watch out for in the coming quarters is the final tariff for its Rajasthan power plant. At present, the company sells its power at Rs 3.74 per unit.
A higher price may increase investor sentiment in the stock. At the current price, the stock has been trading at a price-to-book value of 1.2, which is lower than the three-year historic average of 1.7. International coal prices and merchant tariff rates would be the key factors to watch out for the stock movement in the near term.
India's power sector has always been a story of shortages, and successive governments have attempted to solve the problem through rapid capacity addition without adequate regard to the backend problems. It was with such missionary zeal to wipe out the power shortage that in 2005 the government had launched ultra-mega power plants, or UMPPs, with 4,000 Mw capacity each to be located at coal pitheads and at the coast which would make coal imports easy.
The report card of the four UMPPs that were given out to private companies amid much fanfare - Mundra (Gujarat) to Tata Power and Sasan (Madhya Pradesh), Tilaiya (Jharkhand) and Krishnapatnam (Andhra Pradesh) to Reliance Power - is hardly encouraging: while Mundra and one unit of Sasan are generating power, the other two are yet to start. And now the government has launched two new UMPPs: one each at Bedabahal in Odisha and Cheyyur in Tamil Nadu.
In eight years since UMPPs were first launched, the investment climate has dramatically changed. All large private-sector power players are currently facing tough times and the government may find it hard to attract investments. Considering that the estimated cost of the Bedabahal UMPP is Rs 25,200 crore and of Cheyyur UMPP is Rs 24,200 crore, the investment requirement is huge - assuming debt/equity of 3, this would require the developers to raise over Rs 35,000-crore in loans.
Arranging that kind of money won't be easy. Indian financial institutions are over-exposed to the powers sector. Some power companies like Lanco have gone in for corporate debt restructuring. Interest rates for power companies have escalated to 13-14 per cent per annum. So, project developers are increasingly dependent on external commercial borrowings (ECBs). "Most domestic developers are financially stretched, and so we should work to attract more overseas developers and local companies that are financially stronger, especially those in the public sector," says Kameshwar Rao, leader (energy, utilities and mining), PriceWaterhouseCoopers. "Conditions like fuel availability, PPA (power purchase agreements) and equity infusion for attracting funding are not being met. Promoters were dependent on private equity which has lost interest due to the sector outlook weakening; this is also responsible for domestic banks not making the sanctioned disbursements," says Tata Power Managing Director Anil Sardana.
Brake on imports
To be sure, there has been record addition to India's power capacity in the last few years. Much of that was fuelled by the easy import of equipment for power projects - almost 50 per cent of the new coal-based capacities use imported equipment. However, the recent duties on imported equipment threaten to increase project costs. Sardana says there is a strong need to remove the barriers to entry at all stages and for an optimal pricing and tax strategy to be in place, so that resource allocation takes place based on market forces operating in a credible regulatory regime.
The Union power ministry too appears conscious of the challenges it is facing with regard to the two new UMPPs. So, qualifying norms have been simplified this time, allowing companies which are not in the power sector to bid. "The qualifying requirement, however, for non-power bidders, is higher," says Power Secretary PK Sinha. A bidder needs to have technical capability of Rs 12,600 crore worth of projects in case of power companies in the last five years. The bidder is allowed to include an infrastructure project executed by it worth Rs 1,260 crore in its experience. This threshold was earlier Rs 2,520 crore but was reduced due to the economic slowdown.
Sinha says some 52 developers turned up at the pre-application conference on October 15 which included multinationals like Mitsui, Larsen & Toubro and General Electric, besides domestic power producers like GMR Energy, Adani Power, Sterlite Industries and Tata Power. Reliance Power, which already has three UMPPs, did not take part in the conference. That's because the bidding norms do not allow companies with three UMPPs under construction to bid for more such projects. Rao says a different set of developers such as multinationals, engineering companies and public sector corporations will participate this time. This explains the presence of a large number of non-power generating companies in the pre-application conference.
Easier qualifying criteria is among various other changes being tried out in the bidding for UMPPs this time. For Bedabahal, which comes along with a coal mine, it is only the fixed charge which will constitute the tariff for the purpose of bidding. Since the bidder is expected to source fuel from captive coal mines allocated for the project, the fuel charge payable would be Rs 0.356 a kWh (unit). Though this was not the case in Sasan and Tilaiya, the two pithead UMPPs that were bid out earlier, companies want any variation in the mining cost which is beyond the control of bidders should be adequately compensated.
Cheaper power
From the buyer's point of view, the changes in the bidding norms could make tariffs more realistic. "The rates of UMPPs are typically less. The rates are far lower than power generated out of smaller plants," says Manu Srivastava, managing director, MP Power Management Company, the holding company for three power distribution companies in Madhya Pradesh. The state will source 1,485 Mw from Sasan and 200 Mw from Tilaiya at less than Rs 2 a unit. In addition, it has signed up for buying another 400 mw power from the Bedabahal UMPP. In the case of both Sasan and Tilaiya, Reliance Power is seeking a tariff revision from the Central Electricity Regulatory Commission. Srivastava says the current PPAs do not permit any revision. "It is difficult to seek solution out of the written draft even if some of the reasons for seeking revision are genuine. It makes more sense to allow flexibility in the beginning. The price of power is more a function of factors prevailing then," he says.
Tata Power, which has fully operationalised imported coal-based Mundra UMPP but on account of changes in Indonesian law is seeking an increase in Rs 2.44 tariff it quoted to bag the project, does not see the changes in bidding norms bringing any relief. The company has lobbied the power ministry to retain the previous documentation except setting right a few issues related to fuel risk et cetera. "The present documentation is a completely new concept and provides challenges which add much more risk on the developers end. We would take such decision (on bidding for the two UMPPs) only after deliberations at the board level. At this stage, the terms and conditions indicated in the documentation are a matter of serious concern," says Sardana.
For the power sector, fuel continues to be a serious concern. Sinha, on his part, points out that resolution of 16,000 Mw of stranded gas-based capacity is on the cards with the gas pooling proposal, while fuel supply agreements for 72,000 Mw of coal-based capacity have been signed. With eight tapering linkages, given in lieu of long-term linkages that have not materialised, another 4,000 Mw would get coal. "If these decisions get implemented, new projects will become attractive to bankers and developers," he says. In power, where there are long-gestation projects, capacity planning has to be done over at least a five-year horizon. The challenge would be to make the two new projects on the block live the dream.
Power Ministry is awaiting response from the Karnataka government on restructuring the debt of the state's discoms, before approaching the Cabinet Committee on Economic Affairs with the proposal.
"As soon as Karnataka (government) sends us their response we will send the note to CCEA," an official in the Ministry of Power told .
As per the proposal by the ministry, the state electricity boards of Jharkhand, Bihar and Karnataka will be allowed to convert their outstanding loans, till March 2013, into bonds as part of an amendment to the discom debt restructuring package.
At present, under the government approved Financial Restructuring Package (FRP), 50 per cent of the accumulated debt of the discoms till March 2012 can be converted into bonds to be issued by these distribution companies to the participating lenders, backed by state government guarantees.
This package was approved in September 2012 by the Centre in order to bail out the near-bankrupt discoms.
Karnataka along with Jharkhand and Bihar had approached the Ministry seeking this special provision.
Under the FRP scheme, balance 50 per cent loans will be restructured by providing moratorium on principal and best possible terms for repayments.
The support under the scheme is available for all participating state-owned discoms on fulfilling short-term mandatory conditions.
The government has also stated the debt recast should be accompanied by concrete and measurable actions by discoms or states to improve the operational performance of the distribution utilities.
The accumulated losses of state power distribution companies are estimated at about Rs 1.9 lakh crore as on March 31, 2011, and Rs 2.46 lakh crore as on March 31, 2012.
The debt recast plan for the discoms was formulated based on the report of an expert group headed by B K Chaturvedi, Member (Energy) of the Planning Commission.
The Government of India / Solar Energy Society of India has finalized and issued the guidelines for the solar projects under National Solar Mission Phase II Batch I and issued the RfS for the same.
Power India have analyzed the key aspects of the guidelines as well as RfS and hereby attached the brief analysis of the document.
In the preliminary workings the following aspects have been touched upon:
Read the embedded version of the report below:
The full report can be downloaded at here, or write to us at sparksnetwork@gmail.com .
