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POWER TRACK
Weekly Update on Indian Power Industry
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FOUR-S Power Track
Investment Activity for 2010
Private Equity deals
Date Investor(s) Target Stake (%) Amount ($Mn) Business Stage
AD Hydro (Bhilwara
27-Jan IFC 12 15 Power Generation Project
Energy Ltd.)
General Atlantic, Goldman Sachs,
17-Mar Asian Genco 44 425 Power Generation Late
Norwest Venture Partners
09-Apr Temasek Holdings GMR Energy NA 200 Power Generation Late
02-Jun IDFC GMR Energy NA 74.5 Power Generation Growth
30-Jun Olympus Capital Tata Power 14 300 Power Utility Growth
02-July Blackstone Monnet Power 12.4 60 Power Generation Growth
12-Jul FE Clean, IFC Bhilwara Energy 10.8 50 Power Generation Late
28-Jul Fe Clean Energy Fund Bhilwara Energy 2.4 11 Power Generation Late
Adhunik Power &
30-Jul SBI Maquarie Infrastructure Fund 12 26.8 Power Generation Late
Natural Resources
FE Clean raised its stake in Bhilwara Energy to 8% by buying an additional 2.37% stake, SBI Macquarie Infrastructure Fund acquired a 12% stake in Adhunik Power and
Natural Resources. Till date there have been 9 deals in the sector for a total investment of $1.15bn. Power sector continues to be a preferred choice for PE players.
3110.24
Source: BSE
Research Desk
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prestigious Indian as well as global corporations, investment banks, private equity funds, venture capitalists and hedge funds including India’s Top 5 PE
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News Update
Only 10% of capacity addition target for 2010-11 production through nuclear energy by three folds by 2050.
While the country grapples with power shortages, it is not being Delivering a lecture on fuelling India's power requirements
helped by the abysmal progress of capacity addition. and role of nuclear energy, organized to mark the celebration
Pertinently, out of the total capacity addition target of 20,359 of 94th foundation day of University of Mysore at Crawford
MW for the current fiscal, only 2,105 MW, or 10.33%, has been Hall, the director said India has plans to increase nuclear
achieved, so far. Out of this, the central undertakings have power production by 10% in the next four decades. Presently,
added 205 MW, while state and private participation stand at installed capacity of nuclear power in India is only 3.2% as
1,300 MW and 600 MW, respectively as against the against 78% in France and 19% in China. The main source of
corresponding targets of 7,639 MW, 6,368 MW and 6,352 MW, power generated in our country is thermal and it constitutes
respectively. 63% of total power production.
Research Desk
Four-S Services is India's leading provider of high-end research, financial consulting and Investment banking services. We have executed projects for
prestigious Indian as well as global corporations, investment banks, private equity funds, venture capitalists and hedge funds including India’s Top 5 PE
Funds. For further information, please contact Seema Shukla at seema@four-s.com or reach us as http://www.four-s.com
FOUR-S Power Track
Recently, the flagship company of the group, Adani Enterprises Global News Update
Ltd (AEL), raised nearly `40bn primarily for its coal mining
activity. Dhaka inks power deal with New Delhi
Bangladesh has signed an agreement with India for buying
Policies/Regulations Update power. The accord, valid for 35 years, was signed between the
Bangladesh Power Development Board (BPDB) and the Power
Mumbai to have uniform power tariff Grid Corporation of India Ltd (PGCI). Under the agreement,
Maharashtra energy minister Ajit Pawar said that the Bangladesh would buy 500 MW from Indian power plants and
government was positive about the uniform tariff of electricity import it through the PGCI's regional transmission system. The
in Mumbai and a high-power committee headed by the chief power will be transmitted through a 400 Kv switching station
minister will take further decision on it. People and the public and a 400 Kv single circuit line. The PGCI will construct a 400
representatives across the city have been demanding uniformity Kv double circuit line stretching from Bahrampur in India to
of the rate per unit of electricity used. The consumers of BEST, Bheramara in Bangladesh. Initially, 250 MW will be made
Reliance, MSEB and Tata have been paying different charges for available by India. The transmission is expected to start in
their usage leading to a feeling of disparity among consumers. 2012.
The uniformity, on the lines of the one implemented in Delhi,
will give respite to the consumers paying more rate. Equipment supplies to power sector: Chinese vendors
catching up on BHEL
Power Exchanges, Traders against capping of electricity prices Due to substantial cost and time implications and limited
Most power companies and exchanges are opposed to the manufacturing capacity of the state-run BHEL, contracts for a
Central Electricity Regulatory Commission's (CERC's) proposal to large number of power projects have already been awarded to
cap electricity prices. They feel the move may affect competitive various Chinese equipment manufacturers. In the forthcoming
rates being discovered in tariff-based bidding. The country's days, BHEL, the country's largest heavy-equipment
nodal power regulatory agency, in a discussion paper, argued manufacturing firm, is likely to face a far stiff competition from
that the Electricity Act, 2003, empowers it to regulate rates in its Chinese counterparts, as the trend in ordering of the
case of shortages to ensure reasonable prices. CERC admitted contracts for power plants to Chinese firms have witnessed a
prices were declining, though they were still on the higher side. phenomenal rise since the beginning of the 11th Plan period.
Internationally, prices were in the range of `2.50-3.50 per unit, With no contracts for the 10th Plan projects in their order
while currently prices on exchanges were at `3.50 to `4.85 per books, the Chinese firms have, till recently, managed to acquire
unit. around 25% share in the supply of power equipment to the
projects that have been planned for construction during the
11th Plan programme.
Research Desk
Four-S Services is India's leading provider of high-end research, financial consulting and Investment banking services. We have executed projects for
prestigious Indian as well as global corporations, investment banks, private equity funds, venture capitalists and hedge funds including India’s Top 5 PE
Funds. For further information, please contact Seema Shukla at seema@four-s.com or reach us as http://www.four-s.com
FOUR-S Power Track
Events Calendar
1st Concentrated Solar Thermal Summit India Clean Technology Summit 2010
Date: Sep 7-8, 2010 Date: Sep 29-30, 2010
Place: New Delhi, India Place: New Delhi, India
Organizer: CSP Today Organizer: FICCI
Web: www.csptoday.com/india Tel: 011 23738760-70
Web: www.ficci.com
World Future Energy Summit
Date: Jan 17-20, 2012
Place: Abu Dhabi
Organizer: WFES
Tel: +971 2 4446113
Web: http://www.worldfutureenergysummit.com/
Research Desk
Four-S Services is India's leading provider of high-end research, financial consulting and Investment banking services. We have executed projects for
prestigious Indian as well as global corporations, investment banks, private equity funds, venture capitalists and hedge funds including India’s Top 5 PE
Funds. For further information, please contact Seema Shukla at seema@four-s.com or reach us as http://www.four-s.com
FOUR-S Power Track
Stock Market Update
Companies Mcap (July 30) Rs Mn Price (July 30) 1 week (% change) 1M (% change) 3M (% change) 6M (% change) 12M (% change)
NTPC 1637549.2 198.6 -1.3% 1.2% -3.1% -2.8% -8.2%
Power Grid 422988.5 100.5 -0.4% -0.8% -8.4% -6.7% -14.4%
Reliance Power 392476.0 163.8 -5.2% -4.4% 0.6% 16.9% -3.9%
NHPC 391163.6 31.8 1.4% 11.6% 4.8% -1.1% NA
Tata Power 313198.1 1319.8 -0.3% 1.3% -2.6% 2.6% -2.8%
Reliance Infra 271255.0 1107.8 -2.5% -5.2% -2.5% 6.8% -9.4%
Adani Power 277954.5 127.5 -0.4% 6.2% 1.9% 22.5% NA
Neyveli Lignite 261471.0 155.9 0.0% 1.3% 2.7% 7.9% 11.6%
JSW Energy Ltd. 207876.9 126.8 -1.9% -0.4% 0.8% 22.7% NA
Torrent Power 163278.1 345.6 -0.2% 4.4% 13.5% 18.6% 51.1%
Jaiprakash Power Ventures 146278.5 69.8 -4.1% 0.4% -5.4% 5.3% -16.5%
CESC 49237.2 394.1 -1.1% 5.4% -2.9% 1.0% 22.7%
GIPCL 17061.1 112.8 -1.9% -2.7% -4.8% 7.0% 25.3%
Entegra 3093.6 29.0 2.3% 3.2% -14.2% 6.2% 15.1%
Results
Valuation
Companies CMP Market Cap EV EV/EBIDTA P/E EV/Sales
Rs Mn Mn (x) (x) (x)
NTPC 198.6 1634663.3 1850384 12.3x 18.5x 3.7x
Power Grid 100.5 421725.9 682091 11.6x 20.7x 9.6x
Reliance Power 163.8 417882.1 430991 NA 61.1x NA
NHPC 31.8 377017.8 514512 12.5x 17.3x 9.8x
Tata Power 1319.8 316781.4 446436 11.7x 14.8x 2.4x
Reliance Infra 1107.8 287159.4 383630 34.3x 25.2x 3.8x
Adani Power 127.5 275774.5 320086 131.3x 162.2x 73.6x
Neyveli Lignite 155.9 266504.2 261731 NA 21.4x NA
JSW Energy Ltd. 126.8 205170.9 224601 18.5x 27.5x 9.5x
Torrent Power 345.6 164577.4 194040 10.8x 19.7x 3.3x
Jaiprakash Power Ventures 69.8 151727.2 160379 25.3x 62.7x 22.3x
CESC 394.1 51561.1 78051 11.6x 33.1x 1.8x
GIPCL 112.8 17756.9 26125 12.0x 20.8x 2.2x
Entegra 29.0 3088.2 19630 NA NA NA
Average 327956.4 399478 26.5x 28.6x 6.8x
th
CMP as on 30 July
Adani Power being an outlier has been excluded from the average valuation multiples
Research Desk
Four-S Services is India's leading provider of high-end research, financial consulting and Investment banking services. We have executed projects for
prestigious Indian as well as global corporations, investment banks, private equity funds, venture capitalists and hedge funds including India’s Top 5 PE
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FOUR-S Power Track
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Four-S Services is India's leading provider of high-end research, financial consulting and Investment banking services. We have executed projects for
prestigious Indian as well as global corporations, investment banks, private equity funds, venture capitalists and hedge funds including India’s Top 5 PE
Funds. For further information, please contact Seema Shukla at seema@four-s.com or reach us as http://www.four-s.com