Wednesday 27 February 2008

R-Power: Costliest power stock

Reliance Power, which announced a three-for-five bonus on Sunday, is the costliest power sector stock in India.

The company’s share prices closed at Rs 430.40 on the Bombay Stock Exchange on Monday, taking the total market capitalization to Rs 108,000 crore.

The company’s per megawatt value works out to Rs 68 crore considering that it will have a total capacity of 1,500 MW in 2010.

The company plans to have a capacity of 28,200 MW by 2016. Based on this, the eight-year forward valuation per megawatt will be Rs 3.63 crore.

In comparison, the state-owned National Thermal Power Corporation (NTPC) commands a per MW valuation of Rs 5.92 crore.

Its current power generating capacity is 28,000 MW and the company’s proposes to produce 66,000 MW by 2017. Its 10-year forward valuation is hence Rs 2.51 crore per MW.

Tata Power is currently valued at Rs 12.18 crore for its current capacity of 2,300 MW. The company will be adding 10,000 MW of capacity more by 2012.

Thus, it will have a capacity of around 12300 MW by 2012-end. The means the seven-year forward per MW valuations for the company is only Rs 2.39 crore.

On Monday, shares of Reliance Power, which had a dramatic fall in prices since listing on February 11, on Monday closed above its issue price of Rs 450 — for the first time after two weeks — as investors cheered the liberal bonus issue by the promoters.

Reliance Power closed at Rs 450.40 a share, up 8.05 per cent from Friday’s close, gaining the most since listing two weeks ago.