IPO Update: Indiabulls Power Ltd.

In Quest for Power “full” India

indiabullspowerlogo Indiabuls Power Ltd. has entered the capital markets with an issue of 33.98 Crore shares of Rs. 10 each at a price band of Rs. 40-45 per share. Investment Guru is of the view that India Bulls is just another player trying to leverage the India Power Story like Adani, Reliance and Tatas. The company is currently in the process of setting up its power plants will take 3-4 years to start commercial operations. It’s a story similar to Adani power and hence it’s more of a long term play.

  • The Company is a subsidiary of IBREL, a part of the Indiabulls Group.
  • IBPL is currently executing five power projects: 1,320 MW Amravati Power Project – Phase I, 1,335 MW Nashik Power Project, 1,320 MW Bhaiyathan Power Project, 1320 MW Amravati Power Project – Phase II and 1320 MW Chhattisgarh Power Project.
  • The company expects to sell 75 per cent of the power generation via a long-term power purchase agreement (PPA) and balance through trading of power.
  • Since the company has not yet commenced the operations, there is no financial performance to compare with other players.
  • The projects are expected to be funded through a D/E ratio of 75:25.
  • It is also developing four medium size Hydro Power Projects in Arunachal Pradesh aggregating to 167 MW. Indiabulls has also entered into MoUs with the Govt. of Madhya Pradesh and Jharkhand for setting up of 2640 MW & 1320 MW Thermal Power Projects in each of these States respectively.

Investment Guru is of the view that we have already seen what happened to the Adani and NHPC issues and there is no reason why Indiabulls should get different treatment. The stock is currently commanding a premium of Rs. 4-5 in grey markets but for that matter even Adani commanded a premium in grey matter. This is a pure long term play and the stock will become dull after listing sensations until news of developments on the operational front starts coming in. For those who are looking for listing gains, if the promoters decide to price at a lower band , you can look for a 10% gain otherwise you would have to pray for your luck .

16 comments:

Rohit said...

Hi Rajesh,
Is there any comparable valuation methodology for power companies similar to Land Bank for Real Estate companies ?

George said...

8 anchor investors` help Indiabulls Power to raise Rs 2.75 bn
Copthall Mauritius Investment picked up majority of the anchor investment stake. It bought 21.08 million equity shares there by helping the firm to raise Rs 948.60 million. Next in line was BNP Paribas Arbitrage which picked 10.50 million which helped the firm raise Rs 472 million.

Other anchor investors who subscribed include Nomura India Investment Fund Mother Fund, The Nomura Trust and Banking India Stock Mother Fund Co as the trustee of Nomura India Stock Mother Fund, Indea Capital,Norses Bank, Credit SuissSe Sinsapore and Macquarie Bank.

SEBI introduced the concept of anchor investors in June. An anchor investor can subscribe for up to 30% of the 60% portion reserved for QIBs in an IPO. Such an investor will have a lock in period of one month.

Does this change things i wondeder

mukesh said...

I don't think it really makes any difference. One month lock in period just makes sure that you are not playing for listing gains.

These funds/anchor investors generally have a medium to long term view on stocks. But most of the retail investors apply with listing gains in mind.

GMP said...

Latest Grey Market premium is Rs.3.75

pramod said...

is there ASAB option for this IPO ? Can we download this form online ?

Anonymous said...

Indiabulls IPO Subscription details is as under :
Indiabulls Power's initial public offer (IPO) has been receiving an overwhelming response from the very first day. The issue has been subscribed 8.86 times so far, as per the data available on the NSE website. QIBs (qualified institutional investors) supported the issue with their reserved portion being subscribed over 16 times.

Non-institutional investors' reserved portion got subscribed nearly 3 times and retail 0.5 times.

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Sellapan said...

Rajesh Soni,

Once again, great post. How do you feel about online forex trading in India? Feel like there's anything to gain from it? too risky? too much luck?? im interested in your thoughts.

Anonymous said...

I have applied for Cox & Kings...Any thoughts on it

Josep said...

Hi,
This is a complex issue to discussion. So I suggest you need a expert opinion. check this

Seenath Kumar said...

I think Power companies are really growing in India by sharing this information you are helping many investors.
mutual investment

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PENNY STOCKS said...

Electric power generation seems like a growth area.

PENNY STOCK INVESTMENTS said...

Great review some excellent company prospects.

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