Orient Green Power Ltd - IPO Analysis 18th Sept 2010

Recommendation: Subscribe Object of the Offer

Issue Highlights To finance the construction and development of 4 biomass projects:

Sector - Power
Issue Opens – 21 Sept 2010
Issue Closes – 24 Sept 2010
Face value – Rs 10
Price Band – Rs 47-55
Bid Size – 125 and in multiple thereof
Issue Type
100% Book Built Issue
Issue Size: Rs 900 Cr
Category
 10 MW power project in Narasingpur, Madhya Pradesh
 10 MW biomass power project in Amritsar
 7.5 MW biomass power project in Vellore
 10 MW biomass power project in Patiala
Funding its subsidiaries:
Orient Green Power Company Ltd for undertaking 8 MW biomass power
project in Kishanganj, Rajasthan and Beta Wind Farms Private Ltd
(BWFPL) for undertaking 300 MW wind project in Tamil Nadu.
Funding its subsidiaries:
BWFPL, PSR Green Power Projects Private Ltd and Shriram Non-
Conventional Energy Ltd for repayment of existing debt availed from
No of Shares Indusind Bank, and prepayment of existing debt availed from Yes Bank.

@ Rs 47 @ Rs 55
Investment Rationale
Public Issue 191,489,362 163,636,364
QIB's 95,744,681 81,818,182 Diversified Business Model
The company has a very diversified and strong portfolio which includes
Non
Institutional
28,723,404 24,545,455 biomass, biogas, wind energy and small hydroelectric projects at various
stages of development. As of March 31, 2010, total portfolio of operating
Retail 67,021,277 57,272,727
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.

Shareholding Pattern (%) Forthcoming projects included approximately 815.5 MW capacity, which
Pre-Issue Post-Issue comprised an estimated 622.0 MW of wind energy projects, 178.5 MW of
@ Rs47 @ Rs55 biomass projects and a 15.0 MW small hydroelectric project.
Promoters 75.35% 44.52% 47.34% Strong Market Share
Public 24.65% 55.48% 52.66% As of March, 2010, the company had approximately 8.7% market share of
total installed capacity of wind-based power generation by independent
power producers in India and 7.1% market share of total installed capacity of
Shares Pre-Issue Post-Issue
Outstanding
non bagasse-based biomass-based power generation in India.
276,588,888
@ Rs 47 -- 468,078,250 Customer Base
@ Rs 55 -- 440,225,252 The company has a diverse customer base with a mixture of off-take
arrangements. Their customers include SEBs, distribution companies, private
commercial and industrial consumers and a power trading company.
Grade
Crisil Rating - 4 out of 5
Growth Strategies
Book Running Lead Managers
 The company intends to consolidate its leading position in the Indian
JM Financial Consultants
wind energy and biomass power sectors. The company expects to
Goldman Sachs (India) Securities
increase its aggregate installed capacity by 132.5 MW, 477.0 MW
UBS Securities
and 227.5 MW in the fiscal years ending FY’11, FY’12, FY’13
Axis Bank Limited
respectively.
Registrar
 The company focusing on to maintain and enhance a diversified
Link Intime India Pvt Ltd
portfolio of renewable energy-based power projects with attractive
returns. The company is currently developing a 15.0 MW small
Listing
hydroelectric power project in Orissa, which is expected to be
NSE, BSE
completed and commissioned in the third quarter of FY2012.

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Orient Green Power Ltd Ltd - IPO Analysis

Business Model – Sustainable and Scalable

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. The company is the largest independent
operator and developer of renewable energy power plants in India based on aggregate installed capacity.

Wind Energy Business

The company is among the top two independent operators and developers of wind farms in India based on aggregate
installed capacity. The company wind energy business focuses on the development and operation of wind farms in India,
Europe and South Asia. Its currently operating wind farms are located in the states of Tamil Nadu and Andhra Pradesh,
which are among the top four Indian states with the highest wind.

The following table summarizes its portfolio of wind energy projects as at March 31, 2010:

Estimated Aggregate Estimated Attributable Total/ Estimated Total

Status Gross Capacity (MW) Capacity (MW) WEGs Capacity(MW)
Operating 152.6 152.6 414
Committed 384 384 256
Development 238 228 158
Total Portfolio Capacity 774.6 764.6 828

Biomass Power Business

The company biomass power business focuses primarily on the development and operation of multi-fuel biomass-based
power plants that generate electricity from agri-residues and waste from agriculture crops, forestry and related industries,
such as rice, mustard and soya bean husks, straw, cotton and maize stalks, coconut and ground nut shells, wood chips,
poultry litter, and bagasse.

The following chart summarizes the gross and attributable capacities of our portfolio of biomass projects as at March 31,
2010:

Estimated Aggregate Estimated Attributable

Status Gross Capacity (MW) Capacity (MW) No. of Plants
Operating 40.5 37.1 6
Committed 73.5 66.1 7
Development 105 99 11
Total Portfolio Capacity 219 202.2 24

Financial Performance

Particulars (Rs Cr) FY '09 FY '10

Net Revenue 12.1 56.2
Sales Growth N/A 363.86%
EBIDTA (4.6) 0.7
EBIDTA Margins -37.54% 1.21%
Depreciation 1.5 8.6
Other Income 0.2 7.0
EBIT (6.1) (7.9)
EBIT Margins -50% -14.07%
Interest 3.2 11.0
PAT (8.0) (12.5)
PAT Margins -65.59% -22.23%
Shares Outstanding (mn) 40.5 40.5

Net revenue of the company increased by 363% to Rs 56.2 cr in the year ended FY’10 as compared to Rs 12.1 cr in the
year ended FY’09. However, the company earned a net loss of 12.5 cr in FY’10 as compared to a net loss of 8 cr in FY’09.

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Orient Green Power Ltd Ltd - IPO Analysis

Peer Comparison

Company LTP M.Cap.(Rs. In Cr.) P/E(x) P/BV(x) RONW(%)

Orient Green Power 55* 222* NA 3.9 -3.17
Indowind Energy 47.5 231 17.2 1.64 839
JSW Energy 132.65 21706 22.8 4.55 23.1
NHPC 32.6 40,039 18.4 1.59 10.13
* Higher price of the band

We have compared with direct listed peers. At Rs 55, the higher price of the band, the issue is available at a P/BV of 3.9x.

Recommendation
The company has a good diversified portfolio and good expansion plans in near future. It is a leading Indian independent
renewable energy-based power generation company and the largest independent operator and developer of renewable
energy power plants focused on developing, owning and operating a diversified portfolio of renewable energy power plants.
The company has a good diversified portfolio and good expansion plans in near future. The company is worth subscribing
for good returns.

About the company

The Company was incorporated on December 6, 2006. On January 25, 2010 it acquired 50.25% of the total issued and
outstanding shares of BWFL and on January 29, 2010 its Promoter OGPPL gifted us the remaining 49.75% of the shares of
BWFL to bring all of our wind farms under the umbrella of OGPL.

In September 2007 BWFL, then a group company acquired its first wind assets. BWFL and its subsidiary CWFL continued
to acquire operating wind farms throughout 2008 and 2009. The company began its operations in the biomass power plant
business in Rajasthan with the acquisition of an 8.0 MW operating plant in Rajasthan at Kotputli in April 2008 through its
acquisition of 100% of the shares of Amrit Environmental Technologies Private Limited. Throughout the course of 2008 and
2009 the company acquired various development and operating biomass power plants and began to develop its own
greenfield biomass power plants.

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Orient Green Power Ltd Ltd - IPO Analysis

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Orient Green Power Ltd Ltd - IPO Analysis

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NSE - INB 231219636, INF 231219636

BSE - INB 011219632

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