MOIL (MANGANESE ORE INDIA LTD) : IPO SUBSCRIBE

Price Band- Rs.340 - Rs.375, Face Value- Rs. 10 , 5 % Disc to Retailers

Issue opens on- 26th NOV 2010;

Issue closes on- 1st DEC 2010,

QIB Book- 1,64,64,000 shares (50 % of Net issue)

Retail Book -  1,15,24,800 shares (35 % of Net issue)

Non-Institutional Bidders - 4939200 shares (15 % Net issue)

Employee Reservation- 6,72,000 shares (2 % of Total issue)

Net Public Offer - 3,29,28,000 shares (98 % of Total issue)

Total No. of Shares offered- 3,36,00,000  shares or 20 % of Paid up capital

Equity Shares outstanding after the Issue- 16,80,00,000 Sh

Equity Shares outstanding prior Issue- 16,80,00,000 Sh

Total Size of the Issue- Rs.1142.4 Crs - Rs.1260 cr. 

Standalone Result as on – 31st March 2010

Total Income - Rs. 1,087.853 cr

Net Sales - Rs. 969.395 cr

Net Profit Before Tax - Rs. 706.793 cr

Net Profit After Tax – Rs. 465.62 cr

Share Capital – Rs. 168 cr

Reserves & Surplus – Rs. 1508.716 cr

Earning Per Share – Rs. 27.72/sh.

Book Value – Rs. 99.80/sh.

Cash on Books - Rs.1700.14 cr , Rs. 100/sh.

MANGANESE ORE INDIA LTD - A MINI RATNA PSU

MOIL, India’s biggest & 5th largest in the world in manganese ore production & a public sector company setup in 1896, having its mines in MP& Maharashtra with an combined capacity of 1.093 million tonnes of manganese ore which constitutes 50% of total requirement of the country . The company operates at 60 % plus margins. MOIL is a profit making company for last 15 years and a Debt - Free Company with a cash reserve of Rs.1700 cr is coming with an IPO of about Rs. 1500 cr or 20 % of dilution (may offer 3.38 cr shares). Through this IPO the Central government will divest 10 % of its stake in the company, while Madhya Pradesh & Maharashtra government will divest 5 % each. The entire amount from the IPO will go to central & state governments. Central government holds 81.5 % in MOIL, whereas state government of Maharashtra holds 9.62 % & State government of Madhya Pradesh holds 8.8 % in MOIL.

The company plans to invest Rs.770 cr to expand its production capacity from current 10,93,363 tonnes to 1.475 million tonnes in next 5 years which is a 35 % of increase in its production capacity. MOIL has set up a Ferro Manganese Plant of 10,000 tonnes per year capacity & Electrolytic Manganese Dioxide (EMD) with an annual capacity of 1,000 tonnes per year

MOIL wants to acquire mines in Turkey, South Africa & Gabon. Company operates 10 mines - 6 in Maharashtra & 4 in MP. In recent years, the requirement of manganese has increased due to raise in Steel production; this has lead to greater demand for ore.

The company has a joint venture worth Rs.600 cr with SAIL & Rashtriya Ispat Nigam Ltd for setting up steel plant which is to be commissioned by June – July 2011. These two companies would be undertaking production of steel & MOIL will supply manganese ore. The Debt – Equity ratio in this JV is 1:1.

MOIL has been allotted 814 hectares of land for mining manganese ore in & around Nagpur. Most of these mines are underground (they have reached at 309 meters in depth) and are more than 100 years old; the company has all the required clearances from the Union Environment Ministry for both the states.

SO, I give a SUBSCRIBE / BUY to the MANGANESE ORE IPO.

Net Asset Value - Rs.99.8 (31 March 2010) ; Rs.110.71 (30 June 2010).

Net Worth - Rs. 1676.716 Cr (31 March 2010) ; Rs.1859.963 Cr (30 June 2010)

EV/EBITDA - 6.283 (31 March 2010) reasonably valued.

EV/EBITDA - NMDC - 18.05

EV/EBITDA - SESAGOA - 10.55

EV/EBITDA - SANDUR MANGANESE - 13.27

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