Thursday, March 17, 2011

IPO: PTC INDIA Financial Services

PTC India Financial Services is entering the primary market on 16th March 2011 with a fresh issue of 12.75 crore equity shares and an offer for sale of 2.92 crore equity shares of Rs. 10 each, both, in the price band of Rs. 26 to Rs. 28 per share, with retail investors getting a Re. 1 discount to the issue price. The company will raise Rs. 327-353 crore in fresh issue, while the offer for sale will range between Rs. 75-81 crore, depending on the price discovered. The issue, comprising 27.9% of the company’s post issue paid-up capital, closes on 18th March 2011.
77.60% subsidiary of PTC India with balance 22.40% held equally between Goldman Sachs and Macquarie Group, PTC India Financial Services provides project financing (both debt and equity) to the entire energy value chain (including power generation, transmission and distribution assets, gas pipelines, fuel linked ports, electricity equipment) in India. Presently focussed more on power generation projects, this non-deposit taking NBFC and Infrastructure Finance Company (as stipulated by RBI), also undertakes carbon credit financing against certified emissions reduction (CER), mainly for small Indian private power producers.

As of 31-12-10, company’s equity investments aggregated to Rs. 419 crore comprising 8 companies, including minority stake in India’s first power exchange, Indian Energy Exchange, while its debt investments stood at Rs. 595 crore (of which, 59% long-term debt) in 13 companies, representing projects with 6,794 MW of aggregate power generation capacity. Besides this, it owns 6MW wind farms in Karnataka which have recently got operational in the last 12 months.

The company has strong fundamentals as indicated by a CRAR of 60.57% against requirement of 15% and nil NPAs, as of 31-12-10. For FY10, it clocked total income of Rs. 53 crore and earned PAT of Rs. 25.5 crore, resulting in EPS of Rs. 0.59 on equity of Rs. 435 crore. For 9mFY11, total income rose to Rs. 83 crore (including Rs. 3.5 crore from sale of wind power) with PAT surging to Rs. 31 crore, translating into an EPS of Rs. 0.72.
The company’s networth, as of 31-12-10, stood at Rs. 664 crore, while it had secured loans worth Rs. 477 crore outstanding, with total assets of Rs. 1,168 crore. Its return-on-assets (RoA) has also been improving from 3.2% in FY10 to 3.9% (annualised) for FY11.
PTC India Financial has an understanding with PTC Ashmore Fund to refer all Indian energy sector equity financing over Rs. 100 crore to the Fund, and in-turn will get reference for under-Rs. 100 crore equity financing opportunities as well as all debt and convertible debt financing opportunities from the Fund.
Company is undertaking the IPO to augment its capital base, which will help meet future capital requirements for growth. Also, its Rs. 100 crore retail infra bond issue is underway, which will boost further lending, besides significantly reducing cost of funds, which have, nevertheless been gradually decreasing from 11.86% in FY09 to 10.17% in 9mFY11, but still fares unfavourably vis-à-vis larger peers PFC and REC, which raise funds at average rate of 7-8%. Going forward, company’s Infrastructure Finance Company status will also enable it to higher lending exposure to a single borrower group, quicker access to additional ECBs as well as easier bank financing.
PTC’s holding in the company will drop to 60% post-IPO, while Macquarie Group, which will make a 20.5% CAGR in 3 years from selling part (60%) of its holding, will own 3.46% stake in the company, post-issue.
On a BVPS of Rs. 15.29, as of 31-12-10, company is offering shares in the IPO at PBV of 1.83x at the upper band of Rs. 28 and effective PBV of 1.77x for retail investors, on a pre-money basis. A broad comparison may be drawn with other power sector financiers:
Although PFC, REC and IDFC are much larger as against PTC India Financial, the latter has been showing handsome growth both in terms of fund deployment and on other financial parameters. PBV of the issue is very attractive vis-à-vis peers (excluding PFC which is lying low due to expected FPO) making a post-listing market cap of Rs.1,574 crore seems very fair, given the good fundamentals, experienced management team and healthy upside potential in India’s power sector.
We recommend the issue and investors are advised to apply at the upper end of the price band.
Source: internet (By S P Tulsian)

Stock Idea: VOLTAS

Voltas, the second largest AC brand in India was up and about yesterday. With summer already scorching heat, this is the peak season time for AC companies like Voltas. And the company has made the right move at the right time, getting ready for the summer heat. It announced yesterday introduction of new ACs of 0.75 tonnes to 3 tonnes capacities, adding 5 new models with 20 variants to its existing line-up. It plans to penetrate the market with 70 new ACs in the market this season and hopes to increase its market share from the present 19%.

Q3FY11, as expected being the cyclically behavior of such companies, was subdued for Voltas. On a YoY 5% rise in net sales, it reported a 10% drop in net profit. It’s 50:50 JV with Riyadh based company for execution of electro mechanical projects in the country is expected to go on stream by April 2011. But unless the current turmoil in Bahrain is contained, this date could get postponed. Q4FY11 will be better than Q3 but it is Q1FY12 which will be more exciting. Good long term buy at every dip.
Source: internet (premiuminvestments.in)

Stock Idea: Ess Dee Aluminium

Increase in utilization of idle capacity in FY12 and additional capacity of 15,000 TPA in FY13 to boost topline, revenues likely to grow at a CAGR of over 30% in next two years
- Established relationship with large pharma players and regulatory approvals for pharma packaging like USFDA to act as entry barrier for new entrants
- Volumes and realization growth potential high as 50% of current pharma packaging domestic demand being met from imports, also the packaging expense is just 4% of the product
- Large and diversified client base, total 200 clients, top ten clients account for only 15-18% of total revenues
- Billet caster to become operational from FY12, to help in backward integration and enhance margin
Outlook and Recommendation: MLR Securities believes that there is huge potential in the Indian pharma packaging space and the company’s growth prospects looks bright. The stock has high chances of rerating based on its scalable business model and high entry barriers in the sector. At CMP of Rs416, the stock is trading at 10.1, 7.1 and 5.3 times its adjusted EPS of Rs41.3, Rs59.0 and Rs78.7 for FY11e, FY12e and FY13e respectively. Investors are recommended to buy the stock for a price target of Rs551
Source: internet (Valuenotes by MLR Securities)

Intraday Trading Calls for 17th March

Indian Stock Market may open Negative but recovery expected at lower levels and flat trading expected today with very high volatility.
Today's Intraday Stock Tips / Trading Calls (Keep strict Stop Loss for Each Trade):
SCRIP NAME
TRIGGER
PRICE
TARGET 1
TARGET 2
IDBI BANK
Buy Above
137.25
140.20
144.00
Sell Below
134.70
131.35
128.00
UFLEX LTD.
Buy Above
133.75
138.25
144.00
Sell Below
130.50
126.05
121.00
JINDAL POLY
Buy Above
437.60
450.45
462.00
Sell Below
428.45
421.40
412.00
AMTEK AUTO
Buy Above
122.70
126.00
130.00
Sell Below
120.25
117.10
113.00
ATLANTA
Buy Above
78.10
81.55
85.00
Sell Below
76.35
73.40
70.00
INDIABULL REALEST
Buy Above
112.60
116.20
120.00
Sell Below
110.40
105.35
100.00
NELCAST
Buy Above
90.80
95.20
100.00
Sell Below
88.45
84.15
80.00

GOOD LUCK

Disclaimer

The information in this publication is provided by http://www.moneybazzar.blogspot.com/ is intended for use for Readers & Traders . Every effort is made to provide accurate information, but http://www.moneybazzar.blogspot.com/ cannot guarantee the accuracy of the information or of the market analysis. This is a newsletter and is for informational purposes only. It is not a solicitation or offer to buy or sell futures. There is a high risk of loss in trading futures. You should not trade with money that you cannot afford to lose. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this newsletter. The past performance of any trading system or methodology is not necessarily indicative of future results.



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