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Orient Green Power Company Ltd

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Orient Green Power Company Ltd

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 19th 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 9th 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.

  1. 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.

 

 

 

 

 

 

 

 

 

 

 

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