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Overhang of Abbot Point loan financing out of the way: Adani port has
refinanced the US$2bn bridge loan that it had taken for Abbot Point coal
terminal in Australia in May 2011. The refinancing has been done using a
combination of an AUD1.1bn and US$0.8bn loan at an interest rate of
BBSW+270bps for the AUD loan and 3month US LIBOR+330bps for the USD loan
which is largely in line with expectations.
HMEL commissioning to aid volume pick‐up: The ~9mt HPCL‐Mittal Energy
refinery in Bhatinda, which has been awaited for a while, has been fully
operationalized in the last week of March 2012. This refinery is expected to aid
crude volumes at Mundra , as crude will be transported through the 1,017 km
cross country pipeline connecting Mundra and Bhatinda. We expect this refinery
to contribute ~5mt of additional crude volumes at Mundra in FY13.
Fundamentals on track: Adani is expected to witness strong volume pick-up
over the next few years, largely aided by higher coal volumes on account of the
commissioning of additional phases at Tata UMPP and Adani’s Mundra Power
plants as well as scale-up in crude volumes. The company’s volumes are
expected to increase from 66m tonnes in FY12 to 115m tonnes in FY15.
Negative news flow has kept stock under pressure, valuations attractive: The
company’s stock price has been under pressure on account of negative news
flow regarding its probable involvement in a money laundering issue which has
been categorically denied by the management. On account of this negative
news flow, the company’s stock price has underperformed by 11% in the last
one month. However, with company fundamentals in place as well as the
positive news flow on the stock, we expect the overhang to clear. At CMP of
Rs130, we see a potential upside of 23%. We reiterate our positive stance on the
stock with a ‘BUY’ rating.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Overhang of Abbot Point loan financing out of the way: Adani port has
refinanced the US$2bn bridge loan that it had taken for Abbot Point coal
terminal in Australia in May 2011. The refinancing has been done using a
combination of an AUD1.1bn and US$0.8bn loan at an interest rate of
BBSW+270bps for the AUD loan and 3month US LIBOR+330bps for the USD loan
which is largely in line with expectations.
HMEL commissioning to aid volume pick‐up: The ~9mt HPCL‐Mittal Energy
refinery in Bhatinda, which has been awaited for a while, has been fully
operationalized in the last week of March 2012. This refinery is expected to aid
crude volumes at Mundra , as crude will be transported through the 1,017 km
cross country pipeline connecting Mundra and Bhatinda. We expect this refinery
to contribute ~5mt of additional crude volumes at Mundra in FY13.
Fundamentals on track: Adani is expected to witness strong volume pick-up
over the next few years, largely aided by higher coal volumes on account of the
commissioning of additional phases at Tata UMPP and Adani’s Mundra Power
plants as well as scale-up in crude volumes. The company’s volumes are
expected to increase from 66m tonnes in FY12 to 115m tonnes in FY15.
Negative news flow has kept stock under pressure, valuations attractive: The
company’s stock price has been under pressure on account of negative news
flow regarding its probable involvement in a money laundering issue which has
been categorically denied by the management. On account of this negative
news flow, the company’s stock price has underperformed by 11% in the last
one month. However, with company fundamentals in place as well as the
positive news flow on the stock, we expect the overhang to clear. At CMP of
Rs130, we see a potential upside of 23%. We reiterate our positive stance on the
stock with a ‘BUY’ rating.
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