CRISIL has come out with research report on Shankara Pipes India's IPO. It has assigned a CRISIL IPO Grade 2/5 to the company's IPO. The company proposes an IPO of 61,15,000 equity shares.
CRISIL report on Shankara Pipes India's IPO
CRISIL has assigned a CRISIL IPO Grade "2/5" to the proposed initial public offering of Shankara Pipes India (SPIL). This grade indicates that the fundamentals of the issue are below average, relative to other listed equity securities in India.
The grade reflects SPIL’s ability to grow to be a Rs 5 billion steel pipe and tube distribution company, having a strong foothold in South India. The management has demonstrated a good understanding of the Electronically Resistance Welded (ERW) segment within steel pipe and tube distribution, both in terms of supply arrangements with manufacturers and distribution set up.
Over the last few years, however, SPIL has seen a sharp increase in its working capital requirement, leading to the decision of re-modeling its business strategy by entering retail distribution and launching an e-portal. SPIL’s ability to carry forward the expertise of its old business model into these new areas remains to be seen. In addition, the company’s strategy of owning 16 out of the 35 new retail outlets, to be set up in 2008-09, will depress return on investment in the short run as compared to the competing strategies based on leased model.
The grading also reflects the potential conflict of interest that could arise from a promoter-owned entity, which carries out transportation activity for SPIL and another promoter company. Although more than 60 per cent of Shankara Cargo movers (SCM) revenues are from SPIL, the related party transaction constituted only 8.35 per cent of SPIL’s freight cost in 2006-07.
About the company and the issue:
For the year ended March 2007, the company reported a net profit of Rs 87 million on a turnover of Rs 5020.8 million vis-à-vis a net profit of Rs 69.2 million on a turnover of Rs 3462.6 million in 2005-06. SPIL, which began its retail foray in 2006-07 with 12 outlets, registered a turnover of Rs 380 million and an EBDITA margin of 10.0 per cent in 2006-07.
SPIL aims to raise between Rs 790 and 910 million through its proposed public issue of 61,15,000 equity shares.
Source: Moneycontrol.com
Showing posts with label CRISIL. Show all posts
Showing posts with label CRISIL. Show all posts
Tuesday, April 8, 2008
Monday, December 31, 2007
CRISIL assigns grade 4/5 to Reliance Power IPO
CRISIL has come out with research report on Reliance Power IPO. The firm has assigned a CRISIL IPO Grade '4/5' to the proposed initial public offer of Reliance Power (RPower), in a report dated December 31, 2007.
The company proposed public issue of 260 million equity shares of face value Rs 10 targeted at an issue size in the range of INR 105 to 115 billion.
CRISIL research report on Reliance Power IPO
CRISIL has assigned a CRISIL IPO Grade '4/5' to the proposed initial public offer of Reliance Power (RPower). This grade indicates that the fundamentals of the issue are above average, in relation to other listed equity securities in India.
The grading assigned reflects CRISIL's view that strong demand for power in India will catalyse regulatory facilitation for private participation in the power sector over the medium to long term. In this scenario, early movers like RPower will benefit from attractive business opportunities that are likely to come about as a result, especially if they achieve high levels of financial capability, as is likely for RPower after its proposed IPO.
The grading also reflects the Reliance Anil Dhirubhai Ambani Group's commitment that RPower will be the sole repository of the Group's economic interest in the power generation segment. The grading is tempered by the fact that RPower is planning to put up capacity, on a scale and within a time frame, never achieved in India before and therefore it is likely to face significant implementation challenges.
The grading also reflects the fact that power generators in India will have to depend on SEBs for off take over the short-to-medium term and that their return will be subject to the regulatory oversight in case of Two-part tariff based Projects such as Rosa I (600 MW) and Rosa II (300 MW). Also, returns on the projects won through the competitive bidding route may not be substantially higher due to competition.
About the company
Reliance Power is a part of the Reliance ADA Group and has been established with the objective to develop, construct and operate power projects both domestically and internationally.
RPower does not have any power plant in operation as of now. The company proposes to install 28,200 Mega watt (MW) generation capacity over the next 8 years. Of the total proposed capacity, six projects totalling 7060-MW (Butibori, Shahapur coal, Sasan, Rosa-I &II and Urthing Sobla) are in various stages of implementation. Commercial operations of the first unit of proposed project, Rosa-I (2*300 MW), is expected by December 2009. All the six identified projects would be executed through wholly-owned subsidiaries of RPower, except Urthing Sobla and Butibori, where RPower would hold 80 percent stake and 74 percent stake, respectively.
Besides, the aforementioned identified projects which are in advanced stages of implementation, RPower also proposes to set up seven more generation projects, which are in developmental stage. These include the gas-fired Dadri (7,480 MW) and Shahapur gas project (2,800 MW); the coal-fired MP Power project (3,960 MW) and Krishnapatnam (4,000 MW); three run-of-the-river hydroelectric projects, Siyom (1,000 MW), Tato II (700 MW) and Kalai II (1,200 MW).
Source: Moneycontrol.com
The company proposed public issue of 260 million equity shares of face value Rs 10 targeted at an issue size in the range of INR 105 to 115 billion.
CRISIL research report on Reliance Power IPO
CRISIL has assigned a CRISIL IPO Grade '4/5' to the proposed initial public offer of Reliance Power (RPower). This grade indicates that the fundamentals of the issue are above average, in relation to other listed equity securities in India.
The grading assigned reflects CRISIL's view that strong demand for power in India will catalyse regulatory facilitation for private participation in the power sector over the medium to long term. In this scenario, early movers like RPower will benefit from attractive business opportunities that are likely to come about as a result, especially if they achieve high levels of financial capability, as is likely for RPower after its proposed IPO.
The grading also reflects the Reliance Anil Dhirubhai Ambani Group's commitment that RPower will be the sole repository of the Group's economic interest in the power generation segment. The grading is tempered by the fact that RPower is planning to put up capacity, on a scale and within a time frame, never achieved in India before and therefore it is likely to face significant implementation challenges.
The grading also reflects the fact that power generators in India will have to depend on SEBs for off take over the short-to-medium term and that their return will be subject to the regulatory oversight in case of Two-part tariff based Projects such as Rosa I (600 MW) and Rosa II (300 MW). Also, returns on the projects won through the competitive bidding route may not be substantially higher due to competition.
About the company
Reliance Power is a part of the Reliance ADA Group and has been established with the objective to develop, construct and operate power projects both domestically and internationally.
RPower does not have any power plant in operation as of now. The company proposes to install 28,200 Mega watt (MW) generation capacity over the next 8 years. Of the total proposed capacity, six projects totalling 7060-MW (Butibori, Shahapur coal, Sasan, Rosa-I &II and Urthing Sobla) are in various stages of implementation. Commercial operations of the first unit of proposed project, Rosa-I (2*300 MW), is expected by December 2009. All the six identified projects would be executed through wholly-owned subsidiaries of RPower, except Urthing Sobla and Butibori, where RPower would hold 80 percent stake and 74 percent stake, respectively.
Besides, the aforementioned identified projects which are in advanced stages of implementation, RPower also proposes to set up seven more generation projects, which are in developmental stage. These include the gas-fired Dadri (7,480 MW) and Shahapur gas project (2,800 MW); the coal-fired MP Power project (3,960 MW) and Krishnapatnam (4,000 MW); three run-of-the-river hydroelectric projects, Siyom (1,000 MW), Tato II (700 MW) and Kalai II (1,200 MW).
Source: Moneycontrol.com
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