Visit http://indiaer.blogspot.com/ for complete details �� ��
IPO Details
The Offer MOIL Limited
Sector Mining & Mineral Products
Transaction: Book Building
Issue: Size 33,600,000 equity shares of Rs 10 each
20% of the post offer paid-up capital
IPO Dates Nov 26th 2010 – Nov 30th 2010 (for QIB)
Nov 26th 2010 – Dec 1st 2010 (for Retail / HNI)
Price Band: Rs 340 to Rs 375
5% discount to retail investors as well as to employee quota
Exchanges BSE; NSE
Book Running Lead Managers: Edelweiss Capital Limited; IDBI Capital Market Services Limited; J.P. Morgan India Private Limited
Registrar Karvy Computershare Private Limited
Objects of the Offer
To carry out the disinvestment of 33,600,000 Equity Shares by the Selling Shareholders
and to achieve the benefits of listing the Equity Shares on the Stock Exchanges.
The Company will not receive any proceeds from the Offer and all proceeds shall go to
the Selling Shareholders.
The Business
A “Mini-Ratna” company, MOIL, was the largest producer of manganese ore by volume
in India in Fiscal 2008 (Source: Indian Bureau of Mines, Indian Mineral Yearbook 2008).
Their production of manganese ore increased from 864,890 tonnes in Fiscal 2006 to
1,093,363 tonnes in Fiscal 2010.
They accounted for approximately 50.0% of India's total production of manganese
ore in Fiscal 2008
As on October 30, 2010:
They had access to 21.7 million tonnes of proved and probable reserves and a total
of 69.5 million tonnes of measured, indicated and inferred mineral resources of
manganese ore (JORC report - October 30, 2010 ) .
55.0% of their proved and probable manganese ore reserves have an average
manganese content of 40.0% or higher.
27.5% of their proved and probable manganese ore reserves have an average
manganese content ranging from 36.0% to 39.9%.
None of their mines produce low grade manganese (i.e. below 30.0% manganese
content).
Their Resources: They currently operate
7 underground mines (Kandri, Munsar, Beldongri, Gumgaon, Chikla, Balaghat and
Ukwa mines)
3 opencast mines (Dongri Buzurg, Sitapatore/Sukli, and Tirodi).
Fiscal 2010: Underground Mines - They produced 700,776 tonnes of manganese ore Opencast Mines – They produced 392,587 tonnes of manganese ore
They are actively involved in exploration and development activities with a view to increasing their proved manganese ore reserves. An area of 814.71 hectares in the State of Maharashtra has been reserved for them by a notification from the Ministry of Mines in October 2009. They have applied for prospecting licenses with respect to this area.
Manganese Ore Resources and Reserves
They have access to significant resources and reserves of manganese ore. 55.0% of their
proved and probable manganese ore reserves, as of October 1, 2010, have an average
manganese content of 40.0% or higher.
In addition to medium grade manganese ore, their products include manganese
dioxide and chemical grade manganese ore
.
At the Balaghat and Dongri Buzurg mines, their largest mines, they have
beneficiation plants to upgrade the quality of the manganese ore produced,
which they sell commercially and also use in the manufacturing of their valueadded
products such as high carbon ferro manganese (“HCFM”) and electrolytic
manganese dioxide (“EMD”).
As of September 30, 2010, the processing capacity at the Balaghat and Dongri
Buzurg mines was 500,000 tonnes and 400,000 tonnes per annum (“TPA”),
respectively.
Strategic Investments/Initiatives
They intend to expand their value added production capacity and have entered into joint
ventures with Steel Authority of India Limited (“SAIL”) and Rashtriya Ispat Nigam Limited
(“RINL”) to set up ferro alloy plants in Chhattisgarh and Andhra Pradesh, respectively,
which are collectively expected to produce ferro manganese (with a proposed installed
capacity of 51,000 TPA) and silico manganese (with a proposed installed capacity of
112,500 TPA).
Manganese Ore Sales
Their products are sold through their sales and marketing division to their customers
primarily pursuant to quarterly sales contracts. Sale values include royalty and excise
duty where applicable. Due to the large demand from the Indian manufacturers, they sell
all of their production in the domestic market.
Manganese ore is primarily used to make ferro-alloys for steel production. They sell all
of the manganese ore they produce in the Indian market, primarily to ferro-alloy
producers in the steel industry. Manganese ore sales (gross) represented approximately
89.1%, 82.5%, 83.7% and 84.7% of their total income in Fiscal Years 2008, 2009, 2010
and in the six months ended September 30, 2010, respectively.
Sales are either through sales contracts or by e-auction
Sales Contracts - Manganese ore is primarily sold to their customers pursuant to
quarterly sales contracts with specifications of the chemical and physical
composition of the manganese ore.
Sales by e-auction - HCFM, HCFM slag, manganese dioxide and manganese oxide
are sold through e-auction. The service provider for their sales by e-auction is
MSTC Limited, which is a Government of India undertaking under the Ministry of
Steel.
Wind Power Farm
They operate two wind farms with a total capacity of 20.0 MW.
Nagda Hills in the Dewas district in the state of Madhya Pradesh. This wind farm has
6 wind turbine generators with an aggregate capacity of 4.8 MW. They distribute the
electricity produced to Madhya Pradesh state distribution and transmission
companies and to their Balaghat mine and their ferro manganese plant at Balaghat.
Ratedi hills in the Dewas district in the state of Madhya Pradesh. This wind farm has
19 wind turbine generators capable with an aggregate capacity of 15.2 MW. All the
electricity produced from this wind farm is sold to the Madhya Pradesh Power
Trading Company Limited.
Pricing
Prices for manganese ore are fixed on a quarterly basis and vary depending on the
grade. Prices are determined by taking into consideration international prices for
manganese ore as well as the demand and supply position in India prevailing at the
time.
Due to the fact that EMD is purchased by only a limited number of customers, they set
EMD prices and advertise on their website for direct sale to such customers.
Their key customers include Maharashtra Elektrosmelt Limited and Bhilai Steel Plant
(“Bhilai”), which are both state entities that are a subsidiary and a division of SAIL,
respectively and which together accounted for 22.1% of their manganese ore sales
revenue in Fiscal 2010. Their top ten customers represented approximately 51.5% of
their sales of manganese ore for Fiscal 2010.
Competition
They compete both with other domestic Indian manganese ore producers and with
importers of manganese ore. Even though they are the largest producer of manganese
ore in India in terms of volume, other producers of manganese ore in the Indian market
include Tata Steel Limited, Mangilal Rungta, Sandur Manganese and Iron Ores Limited
and Orissa Minerals Development Company Limited, as well as other private mine
owners.
Strengths
Largest producer of manganese ore in
India with access to significant reserves
Well positioned to capture the growth
potential of the Indian steel industry
Track record of growth and efficient
operations
Strategic location of their mines provides
them with competitive advantages
Strong track record of financial
performance
Strong capabilities for exploration, mine
planning and research development
Experienced senior management and
large pools of skilled manpower
Strategy
Maintain their leadership position in
India and continue to increase
production levels at their existing mines
to capitalize on expected growth of the
Indian steel sector
Engage in intensive exploration through
their extensive lease holdings to prove
additional reserves
Achieve higher forward integration to
capture additional margin
Continue to increase margins,
efficiency, profitability and control costs
Continue their focus on developing
environmentally friendly and socially
sustainable operations
Promoters
Their Promoter is the President of India, acting through the MoS (Ministry of Steel),
Government of India,
No comments:
Post a Comment