GVK Power & Infrastructure – Stock Update…

According to Mr. Manoj Murlidharan Vayalar, Associate VP Derivatives, IIFL PReMIA,stock prices of  GVK Power & Infrastructure can test the level of Rs 17.20.

 

According to Mr. Murlidharan,

"In GVK Power & Infrastructure in last seven days there is good accumulation happening. But the thing is you know it's beaten down very badly. The thing is there is some investment or possibly some traders were taking at least long positions in that. So I would still bet on GVK Power. Around Rs 17.20 odd is what we can expect in that at least in the short term."

The company's trailing 12-month (TTM) EPS was at Rs 0.43 per share. (Sep, 2011). The stock's price-to-earnings (P/E) ratio was 31.58. The latest book value of the company is Rs 16.05 per share. At current value, the price-to-book value of the company was 0.85.

Stock Chart (Courtsey:Moneycontrol)

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Power Trading update – 9th Jan 2012

Power Trading snapshots of two major exchanges  IEX (Indian Energy Exchange) and PXI (Power Exchange of India) for 9th January 2012. On IEX around 52544 Mn Units were sold as against demand of 68071 Mn Units. Similarly on PXI around 3974 Mn Units were sold as against demand of 4419 Mn Units. Detailed report of both the exchanges are depicted below:

 

 

 

Market Snapshot on IEX

Category	Purchase Bid (MWh)	Sell Bid (MWh)	Unconstrained MCV(MWh)	Constrained MCV (MWh)	Unconstrained MCP(Rs/MWh)
Total	68070.9	52544.5	37529.09	31219.87	-
Max	3926.7	3316.9	1961.2	1662.7	4588.85
Min	1994.4	1409	934.2	862	1769.15
Average	2836.29	2189.35	1563.71	1300.83	3411.71

 

Market Snapshot on PXI

Category	Purchase Bid (MWh)	Sell Bid (MWh)	Unconstrained MCV(MWh)	Constrained MCV (MWh)	Unconstrained MCP(Rs/MWh)
Total	4418.85	3974.39	1059.49	599.6	--
Max	252.07	267	129.81	53.74	7010
Min	65.53	75.81	12.07	7.35	2060
Average	184.12	165.6	44.15	24.98	3952.5

 

Legends:

• MCV : Market Clearance Volume
• MCP: Market Clearance Price

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Gujarat to become 7000 MW power surplus state by end 2012…

Narendra Modi, the CM, Gujarat Government, has announced today that, the state is aiming to generate 7,000 MW of surplus power at the end of 2012. The announcement was made on the day of 10th Pravasi Bharatiya Diwas – 2012 held in Jaipur.

 

According to the statements of Gujarat Government, the state had a shortage of 2,000 MW power in the year 2001. However, for the past few years, Gujarat has become a power surplus state. Currently, Gujarat has 4000 MW of surplus electricity and will generate 7000 MW of surplus power by the end of 2012.

 

According to Sh. Modi, this development came due to the Jyotigram Scheme of the State Government which  provides round-the-clock power in every nook and corner of Gujarat.

Speaking on the solar power capacities in Gujarat, Modi mentioned that the state had become a global capital of solar energy generation.

Gujarat is the first state in India to have a solar energy policy which was later adopted by the Government of India. World’s largest solar park with 3,000 Mw of capacity is being established in Gujarat jointly with Clinton Foundation.

Sh. Modi suggested to the Central Government to consider setting up huge solar power projects on Western Indo-Pak border, which can be managed by the Border Security Force (BSF).

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Mahindra to invest Rs. 1000 Crs in solar projects….

Mahindra Solar One, a Joint Venture between the Mahindra Group and Kiran Energy, is planning to invest around Rs. 1,000 crore in solar power generation to build a capacity of 100 megawatts over the next two years, continuing the trend of large business houses investing heavily in the sector.

 
As per the Vice-chairman and MD of Mahindra & Mahindra, Mahindra Solar One is targeting to become among the top three players in the solar industry in next five year’s time.

 

India's solar energy sector has attracted several last business groups such as the Tatas, Anil Ambani's Reliance Power, GMR and the Adani group, which last week commissioned India's biggest solar unit to generate 40 mw.

 

M&M has forayed into the renewable space through Mahindra Cleantech Ventures, which has set up three divisions - Mahindra Solar for power generation, Mahindra EPC for engineering of solar projects and Mahindra Off-grid solutions that offers rooftop setups for solar power generation.

 

Foreign companies are also bidding for projects as India aims to scale up its solar power generation capacity to 20,000 mw by 2020 from around 250 mw now.

M&M has recently commissioned its first grid-connected solar power unit of 5 MW in Rajasthan. 

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NTPC, AP Discoms in pact for 10 MW solar PV plant

According to
Sources,
India’s biggest power generating company, National Thermal Power Corporation (NTPC), has entered into a Power Purchase Agreement (PPA) with Andhra Pradesh Distribution Companies Eastern Power Distribution Company Ltd.(EPDCL), Northern Power Distribution Company Ltd.(NPDCL) and Southern Power Distribution Company Ltd.(SPDCL) for a 10 MW Solar PV  Project.


This PPA is for supply of 10 MW power from Phase-I of Solar PV (photo voltaic) Power Plant to be set up at Ramagundam in Karimnagar district of Andhra Pradesh, near the existing super thermal power plant.                                                                                                                                                                                                                                                                                   

The Project is expected to be commissioned by 2013, the solar power at Ramagundam Solar PV Power Project, which will have a total installed capacity of 25 MW, shall be bundled with unallocated power from coal based stations of NTPC in Southern Region.

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PFC bonds: Attractive rates come with sector risk

• According to
  Sources,
  Power Finance Corporation (PFC), the largest power sector financer, have floated its first public issue of tax-free bonds only a couple of days after the National Highway Authority of India (NHAI) offer opened.
• The rates offered by the bond of PFC are attractive for investors in the higher tax brackets of 20 and 30 per cent, as the interest paid out is tax-free. PFC is offering an 8.2 per cent annual payout for the 10 year option and 8.3 per cent for the 15 year option, same as NHAI.
• Of the two issuers offering same rates though, PFC carries more risks than NHAI. In spite of secured lending with low non-performing assets (NPA), the huge accumulated losses and high debt levels of the power distribution sector and shortage of fuel for power generation are key concerns for stakeholders in power sector including PFC.
• Fuel supply risk and execution delays are bigger concern for PFC as these directly affect its borrowers who are predominantly power generation companies. Private projects (accounting for 8.7 per cent of the total loan book) are especially vulnerable to fuel supply risk and execution delays, which may put pressure on the asset quality. The risk of payment defaults by the State electricity boards to generation projects is also rising. The respective State governments are supporting the distribution companies in near term. Over the long term, distribution sector reforms such as revising tariffs annually and reducing transmission and distribution losses are expected to improve the financial standing of these electricity boards and reduce the counterparty risk for its borrowers.
• On a positive note, PFC continues to enjoy a credit rating that gives it the highest investment grade', with a capital adequacy of 18.2 per cent as of September 2011. The March 2011 maturity pattern of PFC's loan book shows that 57 per cent of the loans are maturing beyond 2015-16 by which time power sector reforms may start yielding benefits. The gross NPA ratio of PFC was 0.22 per cent as of September 2011. The quasi government nature of PFC, also makes for a very low possibility of default.
• Tax free bonds offers are most suitable for investors in higher tax brackets (20 per cent and 30 per cent). Investors with stomach for risk and high net-worth individuals (investment above R.5 lakh) can consider investing in PFC, given the probability of lower allotment in NHAI. The advantage of PFC is that investors can put lower sums in it than NHAI with a minimum application amount of Rs 10,000 as against Rs 50,000 for NHAI. Investors of PFCs infrastructure bonds (80 CCF) should limit their exposure to this bond issue.
• Even as a couple of more bond issues are lined up, investors can consider locking in at current rates offered. The interest rates offered on tax-free bonds are based on government security yields. The rates offered by tax-free bonds should not be more than 50 bps below government security yields of the same maturity, for a public issue. The 10-year government security yield has peaked in November 2011 and is down by 30 basis points during December. This suggests that future tax-free bond offers may offer lower interest rates.

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Monthly Highlights of Indian Power Sector – Nov 11

All India installed capacity at the end of November 2011 (1,85,497 MW):

• Thermal
  • Coal : 1,02,863 MW (56% of total)
  • Gas : 17742 MW (9.6% of total)
  • Diesel : 1200 MW (0.6% of total)
• Nuclear : 4780 MW (2.6% of total)
• Hydro: 38748.4 MW (11 % of total)
• Other Renewable: 20162 MW (11% of total) (Based on 30.06.2011)

Total Electricity Generation till November 2011.

• Thermal       : 4,53,837 MUs (Target – 7,12,234 MUs)
• Hydro           : 1,00,565 MUs (Target – 1,12,050 MUs)
• Nuclear        : 21,206 MUs (Target – 25130 MUs)

All India Thermal PLF: 71.58% (Till Nov 11)

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RPower commissions another 300 MW unit of Rosa Power Project…

According to  Sources, Reliance Power Ltd, has commissioned another 300 MW unit of its Rosa Power Project in Uttar Pradesh on 28th December 2011. With this the company’s total operating capacity has became 900 MW. According to RPower, companies total installed capacity will reach at 5000 MW by the end December 2012 which will include thermal, gas, wind and solar projects.

The total planned capacity of Rosa Power Project is 1200 MW, out of which 900 MW has been commissioned, the balance 300 MW will be commissioned in March 2012. With an investment outlay of over Rs. 6,000 crore, the Rosa project is the largest private sector investment in Uttar Pradesh. Once fully commissioned, electricity generated from the Rosa plant would meet about 15 per cent of Uttar Pradesh's power requirement.

Another projects in the planned 5000 MW of capacity to be installed by December 2012, first unit of 600 MW Butibori Project (Maharashtra), 2400 MW Samalkot Project (Andhra Pradesh) and 660 MW Sasan Project (First Unit).

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Adani Power hits 52-week low as expansion plans put on hold…

According to Sources, share prices of Adani Power Ltd (Gujarat based Power Generating company) have been slipped to their 52-week low of Rs 61.50.

This was due to the company’s announcement to put on hold its plans for capacity expansion of 6,500 megawatts because of a lack of clarity on coal supplies.

Adani Power, currently operates 3,300 MW of power projects and is waiting for the coal allocation by the Government for 3 of its planned projects. The combined coal requirements of these projects is about 25 Mn tonnes per year.

Adani Power’s shares were being traded 7.7% lower at Rs. 62.00. The stock has corrected over 50% so far in the year 2011.

Adani Power is in a downtrend and there are no signals suggesting that the stock is going to move higher immediately. Shares of the company are trading below their 13-day exponential moving average which is at Rs 70. So unless Adani Power crosses Rs 70 and stays above that level, until then the stock will remain under pressure. Adani Power has touched its lifetime lows in trade. The stock is trading at its lowest prices since listing and Hindustan Unilever has done exactly opposite, it is at a lifetime high. Adani Power is in a pretty serious downtrend. Spark  would not see much out of them until the market itself bottoms out finally.

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RPower in talks with U.S. and Chinese banks to raise debt…

According to Sources, Reliance Power Ltd (RPower), the Reliance Group (ADAG) company is currently approaching banks and financial institutions of United States and China to raise funds for its UMPPs Chitrangi and Tilaiya.

As found by Spark, some of the Chinese banks have already funded $1.1 Bn for the Sasan project. 

Overseas debt will be cheaper for RPower as the interest rates of Indian Lenders have been increased sharply due to the RBI’s 13 consecutive rate hikes in two yeas time.

As RPower, buys and will buy equipments from US and Chine, it will help in securing loans from these countries.

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