Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
We were joined by Mr. Kasturi Soundararajan - Head IR and his team, who
shared their outlook on the company.
Captive coal mines to start production by Jun'12 and progressively reach peak
production of 65mn MT - RPL's UMPP wins brought with them, large captive pithead coal
mines - collectively aggregating to 65mn MT of potential peak production. In Sasan mines
- (1) clearances are in place (barring 5mn MT), (2) shovel components to reach shortly, (3)
OB removal started and (4) production expected by Jul'12 (before UMPP). Sasan mines to
achieve peak production of 25mn MT by FY15E - in line with COD of Sasan I (Dec'12-
Mar'14), Sasan II and Chitrangi (Sep13-Mar15). Tilaiya mine (Kerandari B&C) to start
production by Sep'13 and reach peak production of 40mn MT by 2016 - ahead of/ in line
with scheduled COD of Tilaiya I (May'15-Nov'16), Sasan II and Chitrangi (Sep'13 - Mar'15).
The variable cost of generation is expected to be very competitive with Sasan at Rs0.35/
unit and Tilaiya at Rs0.42/unit.
Reliance power has asked Government to change fuel escalation clause for its
Krishnapatnam project post coal export price regulations by Indonesia. Further, it has
highlighted few clearance/land acquisition issues in the Krishnapatnam project. The coal
for the project is to come from its acquired coal mines in Indonesia (coal production to start
by 2012). The key issue in its Indonesian mines (ready for production) is transportation
and logistics, which it expects to resolve soon.
Recent coal export price regulations by Indonesian Government is likely to affect Reliance
Power the least as the coal mining company is a 100% subsidiary. However, it would have
to pay additional taxes and royalties to the Indonesian Government.
Samalkot gas project - Reliance Power had placed the main plant equipment order for its
Samalkot expansion project with GE in October 2010. The order comprises of six gas
turbines, three steam turbines and generators. Two turbines (from GE) have reached the
site and the company plans to commission open cycle by Mar'12 and closed cycle by
Dec'12. It remains hopeful of gas allocations by the Government- the key issue in our
understanding.
Reliance power now has over 17,500MW of PPAs/LOIs after winning
of UPPCL's Case I bid (Rs3.7/unit)
Solid business model - We foresee RPL as the most sustainable private utility with (1)
abundant cheap captive coal, (2) merchant capacity with captive coal, (3) plants near load
centers & (4) low or reasonable tariffs, thereby minimizing the off-take & payment risk.
Currently, the stock trades at 1.6xFY13E book value. Mid term triggers - 1) COD of 4,260MW
by Dec'12 (including a unit of Sasan), 2) coal production in Sasan, 3) PPA with UPPCL at
Rs3.7/unit & 4) milestones in Tilaiya & Indonesian mines. Risks - 1) Indonesian coal
pricing (royalty/tax), 2) domestic coal policy of 85% competitive bid PPA - Rosa II, Butibori
and 3) any issues in Chitrangi/Sasan II & 4) Samalkot gas
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
We were joined by Mr. Kasturi Soundararajan - Head IR and his team, who
shared their outlook on the company.
Captive coal mines to start production by Jun'12 and progressively reach peak
production of 65mn MT - RPL's UMPP wins brought with them, large captive pithead coal
mines - collectively aggregating to 65mn MT of potential peak production. In Sasan mines
- (1) clearances are in place (barring 5mn MT), (2) shovel components to reach shortly, (3)
OB removal started and (4) production expected by Jul'12 (before UMPP). Sasan mines to
achieve peak production of 25mn MT by FY15E - in line with COD of Sasan I (Dec'12-
Mar'14), Sasan II and Chitrangi (Sep13-Mar15). Tilaiya mine (Kerandari B&C) to start
production by Sep'13 and reach peak production of 40mn MT by 2016 - ahead of/ in line
with scheduled COD of Tilaiya I (May'15-Nov'16), Sasan II and Chitrangi (Sep'13 - Mar'15).
The variable cost of generation is expected to be very competitive with Sasan at Rs0.35/
unit and Tilaiya at Rs0.42/unit.
Reliance power has asked Government to change fuel escalation clause for its
Krishnapatnam project post coal export price regulations by Indonesia. Further, it has
highlighted few clearance/land acquisition issues in the Krishnapatnam project. The coal
for the project is to come from its acquired coal mines in Indonesia (coal production to start
by 2012). The key issue in its Indonesian mines (ready for production) is transportation
and logistics, which it expects to resolve soon.
Recent coal export price regulations by Indonesian Government is likely to affect Reliance
Power the least as the coal mining company is a 100% subsidiary. However, it would have
to pay additional taxes and royalties to the Indonesian Government.
Samalkot gas project - Reliance Power had placed the main plant equipment order for its
Samalkot expansion project with GE in October 2010. The order comprises of six gas
turbines, three steam turbines and generators. Two turbines (from GE) have reached the
site and the company plans to commission open cycle by Mar'12 and closed cycle by
Dec'12. It remains hopeful of gas allocations by the Government- the key issue in our
understanding.
Reliance power now has over 17,500MW of PPAs/LOIs after winning
of UPPCL's Case I bid (Rs3.7/unit)
Solid business model - We foresee RPL as the most sustainable private utility with (1)
abundant cheap captive coal, (2) merchant capacity with captive coal, (3) plants near load
centers & (4) low or reasonable tariffs, thereby minimizing the off-take & payment risk.
Currently, the stock trades at 1.6xFY13E book value. Mid term triggers - 1) COD of 4,260MW
by Dec'12 (including a unit of Sasan), 2) coal production in Sasan, 3) PPA with UPPCL at
Rs3.7/unit & 4) milestones in Tilaiya & Indonesian mines. Risks - 1) Indonesian coal
pricing (royalty/tax), 2) domestic coal policy of 85% competitive bid PPA - Rosa II, Butibori
and 3) any issues in Chitrangi/Sasan II & 4) Samalkot gas
No comments:
Post a Comment