Mundra Port and Special Economic Zone, developer and operator of the Mundra Port, one of the leading non-captive private sector ports in India based on volume of cargo during fiscal 2007 is entering the capital markets with its initial public offering (IPO) of 40,250,000 equity shares of Rs 10 each for cash, at a price to be decided through a 100% book building process.
Moneycontrol conducted a poll on market experts to check whether to apply for the public issue or not. Experts said apply.
|
Experts/Company |
Poll Result |
Experts view |
|
R S Iyer
(KR Choksey) |
Apply |
Mundra Port is an excellent issue. Rs 440 price is very reasonable. The company has good strategy and is operating biggest private port in the country. People should apply for listing gains as well as for long term. It is expected to list at around Rs 700 and can go above Rs 800. |
|
Manish Bhatt
(Prabhudas Lilladher) |
Apply |
Mundra Port capacity will be 70 million tonnes, that will be used for bulk cargo, crude oil and provide value added services like well connected rail line. So logistics cost saving will be 25% compared to JNPT.
The company is planning to set up terminal for coal and bulk cargo and that will add 30 million tonne capacity. It is also going to set up SEZ, which will increase valuations of the company. So people should subscribe to the issue. |
|
SP Tulsian
(Investment Advisor) |
Apply |
Mundra Port and Special Economic Zone is the developer and operator of Mundra Port, which has a deep water draft ranging from approx. 15 meters to 32 meters in depth, at a distance of about 15 km. from shore, where it is used to unload crude, a big business potential. Total cargo volume at Mundra Port increased from 11.7 million MT in FY 06 to 19.8 million MT in FY 07.
The concession agreement for the port is 30 years, which would expire on 17-02-2031, and 3,404 acres of land has been permitted to get used for the port alongwith a right to use the foreshore land and waterfront, and on 17-02-2031 the port shall be transferred to Gujarat Maritime Board.
The company presently has 15,665 acres of land available and 16,688 acres of additional land are at various stage of being transferred to the company, thus aggregating 32,353 acres for Port and SEZ.
If we calculate the enterprise value, post IPO, at the upper band of Rs 440 per share, the same works out at Rs 17,600 crore and adding debt of Rs 1,400 crore it works out to Rs 19,000 crore, which is very low compared to the size and operations of the Port and SEZ.
The noteworthy feature of the project is that such a big port is already operational, with virtually, entire land for port and SEZ having acquired. The potential of revenue generation is huge in view of all weather nature as also huge cargo inflow of coal mainly for Tata Power (4,000 MW) Ultra Mega Power Project and Adani Power, 2,640 MW, project. The crude cargo would also give huge revenue to the port. SEZ income would be added to the revenue and profitability of the company, in the coming years. However, concession period of 30 years, expiring in 2031 is considered to be of shorter duration.
As the infrastructure projects have huge potential and this being an operational Port, it represents an excellent investment bet and is recommended for investment even at the upper band of Rs 440 per share. |
The issue comprises of a net issue of 40,100,000 equity shares to the public and a reservation of 150,000 equity shares for eligible employees. The issue and the net issue will constitute 10.05% and 10.01%, respectively, of the fully diluted post issue paid-up capital of the company.
The price band has been fixed between Rs 400 to Rs 440 per equity share. The issue will open on November 1, 2007 and will close on November 7, 2007.
The equity shares of the company, offered through this IPO, are proposed to be listed on the NSE and BSE.
The company is part of the Adani Group, which has interests in different industries including commodities trading, coal mining, power trading, power generation, real estate development, agro processing and logistics, shipping and port operations. The company has the exclusive right to develop and operate Mundra Port and related facilities until February 2031 pursuant to the concession agreement entered on February 17, 2001 with the Gujarat Maritime Board and the Government of Gujarat.
The objects of the issue are to part financing of construction and development of basic infrastructure and the allied facilities in the proposed SEZ at Mundra; construction and development of a terminal for coal and other cargo at Mundra Port; contribution towards investment in Adani Petronet (Dahej) Port Private Limited; contribution towards investment in Adani Logistics Limited; contribution towards investment in Inland Conware Private Limited and general corporate purposes.
The global co-ordinators and book running lead managers to the issue are: DSP Merrill Lynch Limited, JM Financial Consultants Private Limited and SSKI Corporate Finance Limited. The book running lead mangers to the issue are Enam Securities Private Limited, Kotak Mahindra Capital Company Limited, ICICI Securities Limited and SBI Capital Markets Limited.
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