SUZLON on Restructuring : Merges Subsidiaries

Wind energy major Suzlon Energy on 6th Dec 2010, said that its Board of Directors has approved the acquisition of the 'Tower Business Division' of Suzlon Towers and Structures Ltd and 'Operations and Maintenance Division' of Suzlon Infrastructure Services Ltd. Both are wholly owned subsidiaries of Suzlon and the merger would be done subject to receipt of all statutory and regulatory approvals.

Shares of Suzlon Energy closed at Rs 52.25, up 1.06 per cent on the BSE.

Some of the details of this Subsidiaries - As on 31st March 2010.

SUZLON TOWER & STRUCTURE LTD.

Issued,Subscribed,Paid up Capital - Rs. 45 crs.

Reserves & Surplus - Rs. 195.61 crs.

Total Assets - Rs. 506.70 crs.

Turnover - Rs. 533.11 crs.

Profit before Tax - Rs. 31.91 crs.

Provision for Tax & Deferred tax - Rs. 10.78 crs.

Profit After Tax - Rs. 21.13 crs.

SUZLON INFRASTRUCTURE SERVICES LTD.

Issued,Subscribed,Paid up Capital - Rs. 142 crs.

Reserves & Surplus - Rs. 121.58 crs.

Total Assets - Rs. 967.36 crs.

Turnover - Rs. 1105.28 crs.

Profit before Tax - Rs. 86.95 crs.

Provision for Tax & Deffered tax - Rs. 29.89 crs.

Profit After Tax - Rs. 57.06 crs.

So with the merger the networth of Suzlon will be increased by around Rs. 317 crs, which translates into an increase in its book value by about Rs.1.82 per share. Suzlon's debt of Rs. 9252 crs. Reserves & Surplus - Rs.5892 cr.(as on 30 Sept 2010)

Thomas Cook (India) LTD ; BUY ON EVERY DECLINE - TARGET Rs.76.00

Scrip Code: 500413 / THOMASCOOK .

CMP: Rs. 60.45; Buy at Rs.55 - 60 levels .

Target: Rs. 66.00 within next 3-6 weeks ; Long term - Rs.76.00.

Market Cap: Rs. 1279.59 cr.

52 Week High / Low: Rs. 78.65 / Rs. 55.65.

Total Shares: 211677560 shares; Promoters : 163471449 shares – 77.22 % .

Total Public holding : 48206111 shares – 22.77 %.

Book Value: Rs. 11.90; Face Value : Rs. 1.00; EPS : Rs. 1.89.

Div : 37.50 %;P/E : 31.98 times; Ind P/E : 59.60; EV/EBITDA: 23.31 . Total Debt : Rs. 167.65 cr; Enterprise Value: Rs. 70.57 per share.

Total Assets : Rs. 440.11 cr.

Thomas Cook India (TCIL) is India’s largest travel and financial services company. The Company launched its Indian operation in 1881 & incorporated in 1978. Currently, it has presence in 55 cities spreading across 200 locations. On pan India level, the company has office located at Mumbai, Pune, New Delhi, Gurgaon, Chandigarh, Agra, Ahmedabad, Bangalore, Baroda, Bhubhaneshwar, Chennai, Cochin, Goa, Hyderabad, Jaipur, Jalandhar, Kolkata, Trivandrum and Vishakapatnam. With over 125 years of presence in India TCIL is focused on providing a broad spectrum of travel-related services that include foreign exchange, corporate travel, leisure travel, and insurance. The company’s overseas subsidiaries offices are located at Sri Lanka, Mauritius, Germany, France, Spain, Canada, UK, USA, Australia, Japan, Korea and China. The company has employee strength of 3000 people.

Business Division

Travel- The company provides different traveling destinations for domestic inbound/ outbound holidays. The company operates over 40 Group Inclusive Tours (GIT) spread across 5 continents.

Corporate Travel Management- The Company provides travel solutions and travel budgets of several large national and multinational companies

Foreign Exchange- The company is leading foreign exchange provider offering wide range of product and services.

Travel Insurance- Being the only travel company that has license to sell insurance co-brand travel insurance products with TATA AIG General Insurance Company.

Business Outlook

The company has entered into tie up with with cruise line operator Indian Ocean Cruises of London based Foresight Smart Ventures in order to market heritage cruise Ms Ocean Odyssey in India and Mauritius.

The company has announced the Gold Circle Programme (GCP), which is in place of nearly 3 years now and the idea behind this is to build franchise programme. The company have taken this upto 42 franchises over this period with the purpose to cover all markets within city or outside the city. The new GCP that has been appointed in Bangalore is primarily done to supplement companies coverage within the city. This is the policy that the company has followed for three years.

The company targets to settup in 120 cities, over the next two years. Which is at present 72 and hopes to achieve 100 in the year 2011 and to 120 by 2012. Essentially they are using foreign exchange business to drive the growth and the leisure business follows. So today they operate in 72 cities, the leisure operates in 42 cities which are targeted to grow by another 10 cities while growing GCP infrastructure by a larger number by during the same period.

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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