alexa

Search in Indianmoney's WealthPedia

Home Articles IPO Analysis - Indiabulls Power Ltd. (IPL)

IPO Analysis - Indiabulls Power Ltd. (IPL)

IndianMoney.com Research Team | Posted On Saturday, October 10,2009, 08:03 PM

IPO Analysis - Indiabulls Power Ltd. (IPL)

 

 

Indiabulls power ltd. (IPL) has come up with its (IPO) initial public offering to fund its major projects in the field of power generation The company has five thermal power projects under development, which will have a combined installed capacity of 6,615 MW. Amongst them are, the construction and development of the 1,320 MW Amravati Power Project Phase – I (Rs 775 crore from the issue) and 1,335 MW Nashik Power Project (Rs 660 crore from the issue). Apart from these IPL has various other projects in pipeline such as Bhaiyathan Power Project, Amravati Phase II Power Project, Chhattisgarh Power Project and some of them in advanced stages.

The IPO of 390, 700,000 equity shares will open for subscription on 12th October and ends on 15th October.

For the year ended March 31, 2009, it has reported profit of Rs 82.96 crore on total income of Rs 141.34 crore on the consolidated basis.

 “At the higher end of the band, IPL is expected to be valued at 2.1xFY12E to post-issue book value. We value IPL’s 5295MW on DCFE basis at Rs 37 and have given a 25% premium to capture the value of future projects, to arrive at Rs 46 per share value. We would recommend 'Subscribe' for listing gains.”- Prabhudas Lilladher

See Also: How To Invest In Stock Market With Little Money?

 Going further, Crisil has rated IPL(Indiabulls Power Ltd) 3/5 for its IPO based on the fundamentals which certainly indicates a neutral valuations. Given the brand name and the management abilities it would be worth buying this stock or applying for IPO as it looks fairly priced. But given the current market volatility where large IPO’s Like NHPC and OIL INDIA have failed to achieve significant returns since listing.

Company

Issue price

High

CMP

Oil India                          

1050

1210

1195

NHPC

36

42

33.05

Adani power

100

110

101.25

*CMP as on 9-Oct-2009

Therefore recent IPO’s from energy and power sector has not been too attractive in terms of returns.

Considering this situation we would suggest the investors to go for Indiabulls Power Ltd. IPO

With medium term to long term view as most of the projects are in advanced stages and the valuations look very attractive considering its 2012-2013 earnings

Below are the fundamentals of IPL.

Price Band

Rs40 to 45

Crisil IPO Grading

3/5

Opening Date

October 12, 2009

Closing Date

October 15, 2009

BRLM

Morgan Stanley

Issue Size (Rs bn) excluding GSO

Rs 13.6-15.3

Pre-issue equity

1659.00

Fresh Issue

339.8

Employee Reservation

0.00

QIBs

203.88

Retail

101.94

Non-institutional

33.98

Post-issue equity

1998.8

Green-shoe option (GSO)

upto 50.9

Post-issue equity with GSO

2049.7

Share Holdings

Share Holdings

Pre issue (%)

Post Issue (%)

Promoter group

71.4

57.8

Foreign Investors

28.6

23.1

Public

-

16.6

GSO

-

2.5

Source: RHP

Key Financial

Key Financial

FY 09

FY 10E

FY 11E

FY 12E

EBITDA (Rs m)

(195)

(210)

(264)

(354)

PAT (Rs m)

831

715

539

(393)

EPS (Rs)

1.0

0.4

0.3

(0.2)

Growth (%)

346.9

(64.3)

(24.6)

-

Source: Company Data; PL Research

Profitability & Valuation

Profitability & Valuation

FY 09

FY 10E

FY 11E

FY 12E

RoE (%)

3.8

2.1

1.2

(0.9)

RoCE (%)

4.1

2.2

1.6

1.2

P/ BV (x)

1.6

2.0

2.0

2.1

PE (x)

44.9

125.8

166.7

-

Keep your Financial Cognizance up to date with IndianMoney App. Download NOW for simple tips & solutions for your financial wellbeing.

Have a complaint against any company? IndianMoney.com's complaint portal Iamcheated.com can help you resolve the issue. Just visit IamCheated.com and lodge your complaint. If you want to post a review on any company you can post it on Indianmoney.com review and complaint portal IamCheated.com.

Be Wise, Get Rich.

What is your Credit Score? Get FREE Credit Score in 1 Minute!

Get Start Now!
CIBIL Meter
Get It now!
Attention!

This is to inform that Suvision Holdings Pvt Ltd ("IndianMoney.com") do not charge any fees/security deposit/advances towards outsourcing any of its activities. All stake holders are cautioned against any such fraud.