Our meeting with the management of Reliance Infrastructure Ltd. (REL Infra, earlier Reliance Energy Ltd.), on its Analyst Day reinforces our positive view on the stock. REL Infra has reorganized its holding structure to create separate SPVs for each different line of business, which we believe enables the company to unlock value in the EPC and BOT businesses over the medium term.
The company continues to focus on integrating its power distribution business with generation through Reliance Power Ltd. and transmission projects through Reliance Power Transmission Ltd. Moreover, REL infra is looking to scale up its EPC business (Rs90bn order backlog) through bidding for EPC contracts of RPL’s generation projects and other third party projects. The company has reported progress as per schedule in its five road and two metro rail BOTs. Further, Reliance Power (RPL), the power generation SPV of REL Infra, has acquired three coal mine concessions in Indonesia, with estimated reserves of 2bn tons having average GCV of 4,000-4,500Kcal with 30% moisture.
The total reserves are sufficient for 10,000MW of power capacity, including the 4,000MW Krishnapatnam UMPP and 1,200MW Shahpur thermal power plant. RPL has added another 4,000MW of projects to its portfolio, taking the total capacity under development to ~32,000MW. We continue to like REL Infra’s business model of integration across the value chain of power coupled with strong presence in EPC and BOT segments.
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The country's third largest steel producer, JSW Steel, has clocked a net profit rise of 11% at Rs 461 crore in the fourth quarter ending March 31, 2008 as against Rs 413 crore in Q4FY07. The quarter saw the amalgamation of the full years' result of Southern Iron and Steel Company (Siscol) with that of the quarter of JSW Steel following the approval of the amalgamation by the Bombay High Court.
Net sales of JSW for the quarter was up 68% at Rs 4,189 crore as compared to Rs 2,486 crore posted in the corresponding quarter of the previous year. Siscol reported a net turnover (included in JSW's net sales for Q4) of Rs 1,064 crore for the year. Despite a robust growth in JSW's net turnover during the quarter, price reduction in the market in an effort to ease general inflationary pressure, led to a nominal increase in the company's bottom line.
Standalone net profit of the company for the year stood at Rs 1,728 crore, up 33% as compared to Rs 1,292 crore posted in the previous year. Net sales for the same period was at Rs 11,420 crore as against Rs 8,699 crore. Due to duties levied by the government on exports to cool-off high domestic steel prices, JSW would bring down its exports by as much 10-15 per cent of total sales from 26 per cent currently or 948,000 tonne.
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ICICI Securities, the investment banking arm of ICICI Bank, will come out with initial public offer in due course, said CEO of the country’s largest private sector bank K V Kamath. According to him, the bank has not decided on the size of the IPO and when the market conditions are favourable, the bank will consider the IPO.
In January, the board of ICICI Securities had approved the initial public offer and private placement of shares to one or more institutional investors. Soon after the decision, ICICI Bank joint managing director and CFO Chanda Kochhar had said that the shares of ICICI Securities will be listed on the bourses in about six months.
The board had decided to offload 15% of its shares to retail or institutional investors. ICICI Securities, having an equity capital of Rs 61 crore, is a major player in retail broking and has posted revenues of Rs 527 crore during the first nine months of the current fiscal while profits were at Rs108 crore in the same period.
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