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http://content.icicidirect.com/mailimages/ICICIdirect_GVKInfrastructure_ManagementMeetUpdate.pdf
M I A L r e a l e s t a t e m o n e t i s a t i o n h o l d s k e y …
We met the management of GVK Power (GVK) to take a look at
developments across various verticals. The key takeaway are: - GVK
sounded confident on monetisation of MIAL real estate and expects
approval for the same in the next two months. Secondly, it is also looking
for a private equity deal in the airports (the decision on which is getting
delayed due to lack of clarity on policies) and roads division in order to
raise funds. However, lack of clarity remains on the funding of escalated
cost for MIAL and Alaknanda. We highlight that any positive development
on real estate monetisation or PE deal in the road or airport division could
hold the key for the stock performance, going ahead. We maintain our
BUY recommendation purely on valuation though issues across verticals
persist.
ƒ Airport division update
According to the company, real estate approval for MIAL is expected in
the next two months. GVK has already hired JLLM for selling the space
and would start negotiation for selling space once approval comes in. In
terms of escalation in MIAL’s project cost, the rise in project cost to
| 12500 crore from | 9800 crore is expected to be funded through debt
and equity. However, there is a lack of clarity on that part. Furthermore,
GVK is also looking for a private equity deal in the airport segment, the
decision on which is getting delayed due to a lack of clarity on policies.
ƒ Power division update
The approval for interim supply of RLNG from April 1 to May end has
been granted, which means PLF will be high during Q1FY13. Thereafter,
they are looking to close one unit at Gautami due to sub-optimal PLF on
account of gas shortage.
V a l u a t i o n
At the CMP, the stock is trading at 0.8x FY13 P/BV. We highlight that
uncertainty over AERA guidelines, gas supply constraints, delay in real
estate monetisation and lack of clarity over the Hancock deal and ADF
issue still remains. We maintain our BUY recommendation purely on
valuation with an SOTP price target at | 28/share.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://content.icicidirect.com/mailimages/ICICIdirect_GVKInfrastructure_ManagementMeetUpdate.pdf
M I A L r e a l e s t a t e m o n e t i s a t i o n h o l d s k e y …
We met the management of GVK Power (GVK) to take a look at
developments across various verticals. The key takeaway are: - GVK
sounded confident on monetisation of MIAL real estate and expects
approval for the same in the next two months. Secondly, it is also looking
for a private equity deal in the airports (the decision on which is getting
delayed due to lack of clarity on policies) and roads division in order to
raise funds. However, lack of clarity remains on the funding of escalated
cost for MIAL and Alaknanda. We highlight that any positive development
on real estate monetisation or PE deal in the road or airport division could
hold the key for the stock performance, going ahead. We maintain our
BUY recommendation purely on valuation though issues across verticals
persist.
ƒ Airport division update
According to the company, real estate approval for MIAL is expected in
the next two months. GVK has already hired JLLM for selling the space
and would start negotiation for selling space once approval comes in. In
terms of escalation in MIAL’s project cost, the rise in project cost to
| 12500 crore from | 9800 crore is expected to be funded through debt
and equity. However, there is a lack of clarity on that part. Furthermore,
GVK is also looking for a private equity deal in the airport segment, the
decision on which is getting delayed due to a lack of clarity on policies.
ƒ Power division update
The approval for interim supply of RLNG from April 1 to May end has
been granted, which means PLF will be high during Q1FY13. Thereafter,
they are looking to close one unit at Gautami due to sub-optimal PLF on
account of gas shortage.
V a l u a t i o n
At the CMP, the stock is trading at 0.8x FY13 P/BV. We highlight that
uncertainty over AERA guidelines, gas supply constraints, delay in real
estate monetisation and lack of clarity over the Hancock deal and ADF
issue still remains. We maintain our BUY recommendation purely on
valuation with an SOTP price target at | 28/share.
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