Thursday, September 16, 2010

Orient Green Power IPO - Analysis, Recommendation, Subscription, Allotment, Listing

Analysis:
Orient Green Power Company (OGPL), an independent renewable energy based power generation company, is coming up with an IPO of Rs 900 crore. The company is a leading Indian independent renewable energy based power generation company focused on developing, owning and operating a diversified portfolio of renewable energy power plants.
One of the promoters of the company, Shriram EPC holds 35.8% stake in Orient Green Power. The remaining stake in the company is held by two private equity firms - Bessemer Venture Partners and Olympus Capital.

The IPO opens on September 21 and closes on September 24. The company has decided a price band of Rs 47 - 55. As of March 31, 2010, the company's total portfolio of operating projects included 193.1 MW of aggregate installed capacity, which comprised 152.6 MW of wind energy projects and 40.5 MW of biomass projects.

The issue proceeds will be used for the construction and development of four biomass projects of 37.5 MW; for funding subsidiaries, Orient Green Power Company (Rajasthan) for undertaking 8 MW biomass power project in Kishanganj, Rajasthan and Beta Wind Farms Private Limited (BWFPL) for undertaking 300 MW wind project in Tamil Nadu; and funding for subsidiaries BWFPL, PSR Green Power Company and Shriram Non-Conventional Energy for repayment of existing debt.

JM Financial Consultants Private Limited, Goldman Sachs (India) Securities Private Limited, UBS Securities India Private Limited and Axis Bank Limited are book running lead managers to the issue. Link Intime India Private Limited is the registrar.

Recommendation:
CRISIL has assigned Grade 4 to the IPO. We would recommend this IPO to investors. At the lower price band, the stock is priced at 1.6x FY10 BV well in line with the power generation companies trading at P/B 2x. Encash your listing gains though and then you can enter again at a lower price.

Subscription:
The IPO just manage to get fully subscribed at the close. The IPO got subscribed 1.07 times at the close. At the close of the IPO,
QII segment got subscribed 2.09 times
NII segment got subscribed 0.64 times
Retail segment got subscribed 0.18 times

Allotment:
The company has fixed Rs 47 as the issue price. Click here to check if you have been alloted Orient Green Power shares!

Listing:
Orient Green Power got listed on 8th October and closed the day at Rs 45, a 4.26% discount to its issue price of Rs 47. The share hit an intraday high of Rs 46.65 and low of Rs 38.10.


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