Orient Green Power Company Ltd
Electric Utilities
FV – Rs 10; 52wks H/L –20.10/11 ; TTQ – 2.43 Lacs; CMP – Rs 11.11 (As On August 25th 2015; 12.10) ;                        

    Market Cap – Rs 631.13 Crs

Consolidated Financials and Valuations for FY15 (Amt in Rs Crs unless specified)

Equity Capital	Net worth	Long Term Debt	Total Sales	PAT	BV (Rs)	EPS (Rs)	P/E	Industry P/E	P/BV	Promoter’s Stake	Beta
568	826	1869.2	500.3	(233)	14.5	(4.10)	–	14.3	0.8	75	1.9

 

Consolidated Financials and Valuations for Q1 FY16

Equity Capital	Net worth	Total Sales	PAT	BV (Rs)	TTM EPS (Rs)	TTM P/E	Industry P/E	P/BV	Promoter’s Stake	Beta
568	515	108.3	(53.4)	9.1	(4.58)	–	14.3	1.2	75	1.9

 

Triggers:

• Generation Based Incentive (GBI) has been notified which would entitle the company to get a benefit of up to Rs. 10 Million per Mw on 75.6Mw leading to improved viability.
• Government Offers Tax Incentives (such as Tax holidays, Accelerated Depreciation etc.) and Non – Tax Incentives (Feed In tariff, Capital Grants, Rebates On equipments etc.)
• Major non tax Incentive is Renewable Energy Certificates ( RECs are generation-based ‘certificates’ awarded (electronically, in demat form) to those who generate electricity from renewable sources such as wind, biomass, hydro and solar, if they opt not to sell the electricity at a preferentially higher tariff. These certificates are trade-able on the exchanges and are bought by ‘obligated entities’, who are either specified consumers or electricity distribution companies. These obligated entities may either required to purchase a certain quantum of either green power or RECs. Trading happens on the last Wednesday of each month. Within the obligation, there is a small slice carved out for solar-RECs, or RECs from solar power generators.)
• The company is also working on ways towards reducing the fuel cost for its biomass business and has already taken steps such as entering into contract farming agreement with farmers for ensuring stable and consistent supply of fuel.
• Currently , a 20 MW biomass Project in Kolhapur, Maharashtra , 8.4 MW wind project In Gujarat and 7.2 MW wind project In Andhra Pradesh are under construction and plans to develop wind projects Of 70 MW by March 2015.

Recent Updates:

• On 19^th August,2015 the company informed that it would raise Rs.100 Crs from Edelweiss Group Companies (EW Special Opportunities Fund II Pte Ltd, Ecap Securities Ltd and Forefront Capital Management Pvt Ltd.) and the promoters will subscribe to shares worth Rs 150 Crs through SVL Ltd (formerly known as Shriram Industrial Holdings Ltd) and its subsidiaries.
• India has become the world’s third largest market (in terms of generation capacity) surpassing Japan and Russia in 2013 and current installed capacity as of March 2015 stood at ~268 Gw.
• The Government is also planning on constructing 1,07,440 circuit kilometres of transmission lines by 2016-17 as India’s energy consumption has been increasing fastest due to population growth and economic development.

Overwiew:

Orient Green Power Company Limited (OGPL) is one of India’s leading independent renewable energy-based power generation company focused on developing, owning and operating a diversified portfolio of renewable energy power plants. The Company’s portfolio includes Wind and Biomass energy assets at various stages of development. Headquartered in Chennai, Tamil Nadu, OGPL benefits from the support and commitment of the Shriram Group. The other major shareholders are Bessemer Venture Partners through Bessemer India Capital Limited and Olympus Capital through AEP Green Power Limited. The identified Biomass undertaking of the Company will get demerged into BGPL, a subsidiary of the company , effective October 1, 2015.

The Company had raised an IPO on 9^th October,2010 Of Rs. 900 Crs priced at Rs.47 per share to fund capacity expansion and repayment of debt.

    

       Segment Analysis :

1. Biomass Energy Business:

• The company is a clear market leader with an installed capacity of 106 Mw.
• Generated revenues worth Rs.153 Crs .

The Units in Tamil Nadu were facing issues of fluctuating fuel costs and lack of adequate cost effective fuel in some units which led to shut down of these units for some period of time.

2. Wind Energy Business :

• The company has a total installed capacity of 435 MW.
• Generated revenues worth Rs.340 Crs.

Delay of over three weeks for the onset of the wind season impacted the wind business in Q1 FY15.

 

Capacity Expansion Plan – Wind Business
States	Capacity (MW)	Remarks
Andhra Pradesh	43.5	Planned
Madhya Pradseh	14	Planned
Total	57.5

 

Capacity Expansion Trend: (In Units MW)

Business	2010-11	2011-12	2012-13	2013-14	Planned For FY 2015
Wind	179.5	317.1	339	424	494.6
Biomass	40.5	60.5	60.5	86	106
Total	220	377.6	399.5	510	600.6

 

 Management:

• Mr. N Rangachary – Chairman
• Mr. S Venkatachalam – MD
• Mr. K. V Kasturi – CFO

Bulk Deals:

Deal Date	Client Name	Deal Type	Quantity	Price (Rs.)
22-Dec-10	Goldman Sachs Investments Mauririus Ltd	S	4782942	26
08-Oct-10	Crosseas Capital Services Pvt. Ltd	S	2985549	42.89
08-Oct-10	Crosseas Capital Services Pvt. Ltd	P	2985549	43.14

 

Major Non-Promoter Holdings:

Sr. No	Non – Promoters	No. of Shares held	% Of Shares held
1	Life Insurance Corporation Of India	19857996	3.5
2	Theta Management Consultancy Pvt. Ltd	13500000	2.38
3	Olympus India Holdings Limited	13381854	2.36
4	IDBI Bank Ltd.	8484786	1.49
	Total	55224636	9.72

 

Consolidated Financial Trends (In Rs. Crs)

Particulars	FY15	FY14	FY13	FY12	FY11
Equity Paid Up	568	568	468	468	468
Networth	826	1056	1089	1189	1262
Total Debt	1923	1949	1690	1177	695
Net Sales	500	421	460	283	240
Other Income	8	8	24	32	31
PAT	-233	-187.6	-69.9	-69.3	10.8
Book Value (Rs)	14.5	18.6	23.3	25.4	27.0
EPS (Rs)	-4.10	-3.30	-1.49	-1.48	0.23

 

*During the year 2013-2014 fresh issue of 100000000 shares was made of face value Rs 10 each.

Risks:

• Dependent On Governmnent Policies to a greater extent and regulatory Issues related to Incentives.
• High Financed Costs.
• High feedstock prices/low quality due to heavy rains for its Bio-mass plants.
• Increase in Levy Charges in Tamil Nadu for Wind Business.
• Largely Dependent On nature which is unpredictable and uncontrollable.