Reliance Power Limited IPO Message Board (Page 283)

Question

while calculating the retail of one lakh which end the price range will be taken into consideration if the investor applies at the cut -off price?

Application 430/- ke hisab se calculate hogi ya 450/- ke hisab se?

By Raja Rajeshwari, CNBC-TV18

We have been talking about execution risk, which is running large in Reliance Power IPO, the first on top of it would be the natural gas availability and the coal availability and a whole host of execution risks that is likely to come into play.

What we are also watching out for is what will be the cost competitiveness that they will be able to do whether they will have the long-term tie-ups. These are the huge host of execution risks that runs in it. Since they are not going to be making huge profits right now, how do we value this company? Most analysts are looking at a DCF model or a replacement cost method.

So we have just computed the numbers for the various projects they have announced. If you take the DCF value of it, the DCF value works out to Rs 29,800 crores, if you carry the various breakup of it. The market cap of this company on the upper band works out to Rs 1 lakh 700 crores.

Most of these power companies over the past few months were been valued on a replacement value method. If you were to take Rs 4-crore per megawatt kind of replacement method, then the numbers work out at Rs 95,300 odd crores.

So again vis-à-vis the marketcap of this company on the upper band works out higher, than what we compute from the DCF method or the replacement method.

So on these two values, it is tagged up on the higher end. On the peer comparison, we have been just trying to figure out how most of this Asian peers, the Indian peers are tagged out right now. On an FY09 basis, Reliance Energy is trading at 6 times future earnings, CESC would be trading at 2.08 FY09 earnings. When you are working out on Reliance Power ,you need to watch out for the financials that it’s likely to have from FY010, which is mostly FY011 onwards which is when its first power plant comes into plays.

But just to give you a sense most of their Asian peers are trading at 3 times price to book whereas this company would on its upper band be priced on a higher level.

Subscribe to Rel Power for listing gains: India Cap Mkts

ndia Capital Markets has come out with research report on Reliance Power (REPL) IPO. The firm has recommended investors to subscribe with a view to book profits on listing.

Reliance Power is planning to raise around Rs 10,530-11,700 crore from its initial public offering (IPO) of 26 crore equity shares with a face value of Rs 10, for cash, a price decided through 100% book building process. The price band has been fixed at Rs 405-450 per share.

India Capital Markets report on Reliance Power IPO

Reliance Power is a part of the Reliance ADA group and was established to develop, construct and operate power projects domestically and internationally. The electricity demand and supply imbalance in India presents significant opportunities in the power generation sector. The Government of India’s vision of Power for all by 2012 will require aggressive growth and increased private sector participation.

To capitalize on this opportunity, the company is developing 13 medium and large sized power projects with a combined planned installed capacity of 28200 MW, one of the largest portfolios of power generation assets under development in India.

Investment Rationale

Largest Power generation projects under development in India

REPL is developing 13 projects having a planned installed capacity of 28200 MW, comprising one of the largest power generation portfolios under development in India. Sasan, a 3960 MW coal-fired UMPP to be located in Madhya Pradesh, is expected to be the largest coal fired power project at a single location in India.

Dadri a 7,480 MW gas-fired project to be located in Uttar Pradesh is expected to be the largest gas-fired power project at a single location in the world. Krishnapatnam, a 4,000 MW coal-fired project, is the third and the most recently awarded UMPP.

Diverse portfolio of Power projects

REPL is developing projects that are diverse in geographic location, fuel type, fuel source and off-take. The identified project sites are located in western India, northern India, northeastern India and southern India. They include 7 coal-fired projects (14620MW), 2 gas fired projects (10280MW) and 4 hydroelectric projects (3300MW).

Strategically located Power Projects

The company has located the majority of projects in the northern, western and northeastern regions of India to cater to the significant unmet demand in the northern and western regions of India. According to the CEA, the peak deficit was 9,639 MW in western India and 2,813 MW in northern India for the period between April and September 2007. As the peak demand is expected to go up to 152,746 MW and 218,209 MW by the fiscal years ending March 31, 2012 and March 31, 2017, respectively, REPL believes that its projects are well positioned to serve expected demand.

Concerns

Depreciation of rupee against foreign currencies may have an adverse affect on the results of operations

While a substantial portion of revenue will be denominated in Rupees, REPL expects to incur significant indebtedness denominated in foreign currencies to finance the development of power projects. Any depreciation in rupee against these currencies will increase the rupee cost to the company of servicing and repaying foreign currency borrowings and costs.

REPL faces significant competition as a result of deregulation in the Indian power sector

The Electricity Act of 2003 removed certain licensing requirements for thermal power generation companies, provided for open access to transmission and distribution networks and also facilitated additional capacity generation through captive power plants. The company may face significant competition with other Indian companies seeking to expand their power generation business as well as international power companies while negotiating or bidding for power projects. The company may also compete with central and state power utilities.

Implementation delays

Being long gestation projects the company may face implementation delays. The failure to complete project development within stipulated time period could render certain benefits granted by the government unavailable and can affect REPL’s earnings.

Outlook & valuation

REPL plans to capitalize on experience and expertise of REL in the development and operation of power projects and distribution, transmission and trading of power in India. REPL’s 13 projects have a planned capacity of 28200 MW, which is the largest power generation portfolio under development in India. The company however has not yet commenced production on most its projects and there could be some delays in implementations which is one of the biggest concern.

Considering the fact that Reliance ADA is a diversified business group with a strong reputation in India and with the current hype in the Indian power sector we expect the stock to do well on listing. We recommend investors to Subscribe with a view to book profits on listing.

1444. Prince
Apply three application of 30,000 /- each ..
You will get more shares with respect to when applied for 1 application of 1 lakh ..

Shoeb

RC(1422)try to login.
click "trouble for login" below the login button. they will ask
some questions for verification. if you remember the user name & password, then they will immediately unlock the site. if u don't, they will send password to your email add given in the site. you can apply by paper but not ur brother.

Check this analysis ..

http://www.moneycontrol.com/india/news/ipo-upcoming-issues/how-should-retail-players-approach-rel-power-ipo/13/57/321142

Anyway go for part payment

On form there is one space for bank detail for refund. Is it necessary to fill up. I am in mumbai and get refund through ECS always in past.

Hi Mitali, go for Partly paid shares. More chances to get allotment

there is no difference in allotment, when applied for part or fully paid, it very much mentioned in the prospectus..
You better go for partly paid share..

As far as lockin is concerned.. there is as such no lockin unless the alloted share amount ( 430 x shares allotted ) is less than the partly paid shares applied for.

Investor prefer partly paid option, as our money in not blocked, but if the issue is subcribed just 1 times, than the shares will be tradeble when we give the balance amount..

Moreover, if the issue is subscribed more than 3 times, than dont bother for payment option .. still if you need any more clarificaion , i am here to help you out ..

With Care
Shoeb

Is there any difference of allotment of shares being applied through full or part payment method. Will the partly paid up applied shares be automatically converted to full shares if allotment is made less against the applied one.

CAN SOME ONE TELL ME HOW TO INVEST PART/FULL PAYMENT...I MEAN WHICH WILL GIVE BETTER RESULTS....PLEASE REPLY?

Can someone provide a clear cut and sure shot explanation for this -

when applying with part payment option; if one gets allocation for amount less than already paid, will still their shares be lcoked and not available for trading on listing day?

For 1422,
You can still apply, through Physical Format,you need your DMAT A/C only. But remember to write your bank's MICR code correctly, else refund will be through Cheque

Power on toh india on

Hi Friends,
This is what icicidirectDOTcom has put up about the issue.

Key Concerns

No operating history, difficult to estimate future performance.

Reliance Power currently has no power plants in operation or other revenue-generating operations. It has no significant operating history from which can one could evaluate its business and future prospects and viability.

Timely execution of projects vital

The company’s on-going projects have a long gestation period. The completion targets for projects are subject to various risks, including, among other things, contractor performance shortfalls, unforeseen engineering problems, unanticipated cost increases or changes in scope and delays in obtaining certain property rights, fuel supply and government approvals, any of which could give rise to delays, cost overruns or the termination of a project’s development.

Huge capex required

The company require significant capital expenditures and if it is not able to obtain the necessary funds on acceptable terms, it may not be able to fund projects and its business may be adversely affected.

Fuel supply requirements

The company’s operations will have significant fuel requirements, and it may not be able to ensure the availability of fuel at competitive prices.

They are not giving any recommendation to apply or not taking cover by saying "Since ICICI Securities Limited is a syndicate member for the issue no recommendation has been made due to regulatory requirements."

All brokers are scared of rubbing Anilbhai on the wrong side.
He is too big and powerful for anyone daring to write against the issue.

Hence they are all guarded in their words.They say that the huge power deficit country can make do with such projects but at what price and is this issue justified at the price everyone is silent.

LOT OF QUESTION MARKS UNANSWERED???

@RC...........
First try to get the new password...
If it is not possible put ur order through phone......
they will do it.....................

Is it true that applicant applied in full payment will be given more priority over part payment ???

Can anybody tell me what is the advantage of applying with full payment instead of partial payment. Does it anyway favourable to get an allotment.

how much listing are you guys are expecting. and investor of rpl is going to take listing benifit only it means all are going to sell the stock on listing. that's why heavy selling can come in the stock on the date of listing.what should we expact from the stock less the 450 or good loss.