Infra orders and news summary - Fortnight ending 5th October 2011 :: IDFC Securities

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Highlight of the fortnight: Average traded power tariffs on power exchanges had spiked to above Rs6/unit during last fortnight. The sharp rise in traded tariffs was driven by higher short term power demand from southern states such as AP, which have witnessed fall in generation from coal based plants due to lower supply of coal. The ongoing agitation for separate Telangana state has resulted in road and rail transportation blockages, leading to shortage of coal for AP-based power plants. The AP Government has consequently bought power in short term trading market, resulting in spike in both short term traded power volumes as well as tariffs on the power exchanges.

Last fortnight, the average traded tariff on the IEX power exchange was Rs4.33/unit, compared to previous fortnight’s average Rs3.07/unit.

Summary

A. Orders announced

• Total Rs72bn worth of orders announced last fortnight
• Major orders received by

o        BHEL (Rs37.8bn order for 2*660MW MP power project for DB Power Ltd )

o        Punj Lloyd (Rs12bn order for Balance of Plant for Haldia Energy plant)

B.      Major Infra news and announcements

·         GMR announces sale of 30% stake in GMR Energy (Singapore) to Petronas

·         Reliance Infrastructure commissions Parli- Solapur transmission link (part of WRSS project)

·         NTPC achieves financial closure for 390MW Muzaffarpur thermal power project in Bihar

·         PGCIL commissions transmission lines for two units of Mundra UMPP

·         GMR announces receipt of LoA for Kishangarh-Udaipur-Ahmedabad mega highway project

·         GVK receives LoA for 4-laning of Shivpuri-Dewas NHAI road BOT project in Madhya Pradesh

·         Ministry of Power expected to introduce revised standard document for power plant bidding