Adani Power is coming out with the next Public Issue that will be closely watched in two weeks and with 30 crore shares on offer, it could easily mop up 3000 Crores for its 13.5% post IPO stake on offer. For a total projects of 6600 MW in Mundra, Dahej and Tiroda, the company estimates a cost of Rs 29000 Crores or $ 5.8 b which is a little under Reliance’s estimate of $1m per MW. The promoters are doing a lot of jugglery between the projects as they also own Mundra port et al but they do have preliminary PPA arrangements with Haryana ( Mundra Ph IV) , MP (Tiroda) and Mundra Port, Gujarat, Maharashtra (Mundra, Dahej). these are big ticket issues and one mis-step in the market could easily derail the infrastructure engine for 12-18 months
Adani Power has done some private placements in Mar and even in June and most are at par, with some at a premium of Rs 90, which seems to make for a really large shareholder base and may dilute premium for others? Does that mean they anticipate a weak response to the market? Probably, it is just the cost of long term venture equity. Interestingly out of the @180 million shares post issue, 1450 million would have no lock up or lock in ( lock up) period of less than one year. For the Mndra project, Phase I&II was financed by a consortium of Public Sector Banks borught together by ICICI Bank for Rs 3200 Crores ( $640 m)
Foreign portfolio investors have poured in $8.7 billion since April, while speculation is already rife for PSU divestment in Coal India and National Hydro Electric Corp in the Power sector, each easily worth a $1 b for 15-20% stake. Also SBI Infrastructure fund with Macquarie has raised its bucket size to !.5 billion adding another $500m. Adani Power is raising $600m
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Lifestyle Infrastructure
One of our special themes at the Advantages weblogs has been our assertion that US, India, China and most of the rest of the world that is growing
is likely to do so on the basis of a consumption revolution. Below is out insight piece that opened the chapter on India's final coming out that was much awaited but wasn't really happening till 2009..
The Commonwealth Games Infrastructure Train
A few years ago, when the Indian women shot Gold in Commonwealth Hockey and our aim in general started consistently being medal grade, we won the bid for New Delhi to host the games in 2010. This business of infrastructure had been mystifying sportspersons for decades in India; none too easily supported by the overarching smell of rent and inadequate facilities for local sports persons historically.
Even today most sports would bow out in front of Cricket and that is not a full-fledged event at the CWG, though there is still a toss-up for the T20 version to be added. Like most other spheres of life, China has been doing it higher, faster and stronger, having already held the challenging Olympics in 2008 earning over $2b for Beijing, the host city.
The story is quite public and you must have all followed it at least since August 2009 when the first few fistcuffs were exchanged regarding the lack of preparations for the CWG event now just 6-7 months away. The Sports Minister and the Games Organising Committee Chair Suresh Kalmadi has variously ben painted and vilified while we look at the rejuvenated parts of Wembley in London and survive on facepaint and cheering the local IPL franchise in Cricket games. The painting of events apart we just thought it important for Sports and Tourist infrastructure worth $1.5 billion to be included in the India story at about this time.
This preamble would survive your taste buds and your snipping scissors in the mind and we�ll come back right after lunch is over for you..
And the Original piece..follow up article on our Lifestyle Economics stream
If you have been following the India story closely, India�fs new developments are focussed on Infrastructure and Retail along with giant leaps in the Entertainment business. You can look closely at the India stories athttp://advantages.us/inframils to get a flavor of what�fs happening in Indian Infrastructure
On the other hand Retail Lifestyle businesses are increasingly attracting investors�cRural Markets may grow at a faster pace at least on the Drawing board. �c Where is Investor access? Why is it still on the government to make it happen? The FDI limits and the others are fairly rational policies..but where are the investors?..
Nanos will roll into homes by July end and IPL teams are already applying for trademarks as it looks set to become the greatest sporting extravaganza in the world, already ranked at #2 behind the NFL season in the USA. The 3G challenge will tear at Telecom companies�f profits in the coming years�c
(The image is of a young indian golfer in Scotland)
BUT, Importantly, India caught on to serious lifestyle investments early in 2005, Today with the debut of Cox and Kings IPO..
Where it is now?
Towns like Jalandhar, Ludhiana in Punjab, Jaipur and Agra on the Golden Triangle and such state capitals, heritage and business towns like Ahmedabad, Surat and Nagpur present a unique opportunity for Indian hospitality business to scale up, esp as Indian railways, india�fs aviation footprint and the road infrastructure will follow in step with the boom. Note: The Indian Maharaja with TC, Maharajas Express with Cox & Kings, and the other two luxury trains have started first season bookings quite well and money is being spendt to add gym and pool to the Palace on wheels as well ( More here ) Golden Palace started from Bangalore is not doing so well apparently. The Maharajas Express for example is 84 persons at an average of $1000 per night for a 7 day- 8 night tour between Mumbai and Delhi
Adani Power will likelty list at 700-800 with the first day oversubscription likely 7-8 times and spilling into retail