Get set for (re)entry of Tata Power in the Mumbai Retail sector.
See this..
Increased competition is good news for 25L electricity consumers who are presently 'suffering' under R-ADAG's tyranny.
Now, to clear out a few doubts (no doubt, created by some vested interests):
1. Tata Power does NOT have to apply for a fresh License, as reported in some sections of the Press. It already holds a valid license for supply to the whole of Mumbai. In fact, the interpretation of that very license was the one questioned by REL in the Supreme Court. So the question of a 'fresh public hearing' (which is mandatory before grant of a license) need not be held.
2. Tata Power does not need to file for a fresh 'Tariff Order.' It has already received an approval for its latest Tariff Order as it is already supplying electricity to Mumbai and already HAS some retail consumers. MERC had put a 'stay' on it getting 'new consumers' below 1000 kV, but it was (and is) already serving many consumers in the general retail segment.
3. Tata Power need not set up an entirely new distribution network. The Electricity Act 2003, in its great wisdom, had already forseen this situation and already provides for any distributor using the distribution assets of another (to avoid cost-escalation). The second distributor woulod need to pay the first one a charge for usage, called 'wheeling charges'. Incidentally, MERC has already approved standard wheeling charges as well.
The only delay I foresee is in the logistics of the execution. REL will now give TPC a hard time in freezing these wheeling charges (and also in finalising the modalities of which assets it can 'share').
The other side issue that arises is that of REL's requirement of electricity, now that many of its customers may want to move to TPC.
REL may now, not need so much electricity from outside its Dahanu plant and hence need not buy 'expensive power'. Also, it may not need so much of capital expenditure.
Hence, its chargeable tariff may actually come down !! Right ?
Well, maybe I'm not so smart after all ;)
Saturday, July 12, 2008
Is MERC lying .. or is REL Infra lying ?? - Open letter to MERC
06.07.08 (great date!)
To
The Secretary & Members
Maharashtra Electricity Regulatory Commission
Centre 1, World Trade Centre
Mumbai
Dear Sirs,
Re: Status of Reliance Infrastructure Ltd (erstwhile Reliance Energy Ltd) as an Electricity Distributor under the EA 2003
Please refer attached 2 image files:
1. MERC-RTI.jpg
2. REL_July4th_article.jpg
The first one is a reply sent by your organisation stating that Reliance Infrastructure Ltd is not authorised to distribute electricity.
The second one is an advertisement released by the same Reliance company stating (in the first para under 'Background') that 'Reliance Infrastructure is an electricity distribution company with a distribution license to supply electricity in and around the suburbs of Mumbai..'
Now, please tell us (the general public whom you are supposed to serve - and who pay for your salaries from their hard earned money) .. WHO is LYING?
Did your PIO lie to Mr. Ponrathnam (in the RTI reply) or is the Reliance ADAG company lying (in a public advertisement)?
If your PIO is lying - he can be penalised and so can your entire organisation.
If the Reliance ADAG is lying.. what action can you take? In the past there has never been any penal action on the lies that this same Reliance ADAG company has told (please refer the latest Tariff Order - where they have 'admitted' to making numerous mistakes .. and you have done NOTHING!)
Look forward to receiving your response on this issue.
Warm regards,
Sandeep N. Ohri
Coordinator-bijlee
Bombay Small Scale Industries Association
snohri2004@yahoo.co.in
9833097575
Copy to: The Fourth estate and other like-minded people - with a request to ensure fair play to the common tax-payer...
To
The Secretary & Members
Maharashtra Electricity Regulatory Commission
Centre 1, World Trade Centre
Mumbai
Dear Sirs,
Re: Status of Reliance Infrastructure Ltd (erstwhile Reliance Energy Ltd) as an Electricity Distributor under the EA 2003
Please refer attached 2 image files:
1. MERC-RTI.jpg
2. REL_July4th_article.jpg
The first one is a reply sent by your organisation stating that Reliance Infrastructure Ltd is not authorised to distribute electricity.
The second one is an advertisement released by the same Reliance company stating (in the first para under 'Background') that 'Reliance Infrastructure is an electricity distribution company with a distribution license to supply electricity in and around the suburbs of Mumbai..'
Now, please tell us (the general public whom you are supposed to serve - and who pay for your salaries from their hard earned money) .. WHO is LYING?
Did your PIO lie to Mr. Ponrathnam (in the RTI reply) or is the Reliance ADAG company lying (in a public advertisement)?
If your PIO is lying - he can be penalised and so can your entire organisation.
If the Reliance ADAG is lying.. what action can you take? In the past there has never been any penal action on the lies that this same Reliance ADAG company has told (please refer the latest Tariff Order - where they have 'admitted' to making numerous mistakes .. and you have done NOTHING!)
Look forward to receiving your response on this issue.
Warm regards,
Sandeep N. Ohri
Coordinator-bijlee
Bombay Small Scale Industries Association
snohri2004@yahoo.co.in
9833097575
Copy to: The Fourth estate and other like-minded people - with a request to ensure fair play to the common tax-payer...
"Name change reflects new business", says REL
Remember I had said that when there is a change in name, the objectives of the company also change? Read here, what the company themselves have to say about their name change.
Go on, MERC, keep saying that a name change makes no difference.. now how are you going to figure out how much of the tariff collected is going towards Mumbai electricity business...
I'm DAMN sure WE suburban residents are paying for ALL their other business ...
Here's an interesting point of view .. if their costs of electricity purchase goes up -- they don't HAVE to raise the tariff, they will just report a slightly lower profit in their quarterly results .. so
WHY the hell doesn't MERC understand this ????
If anyone has the gaul .. please haul these guys up...!!
Go on, MERC, keep saying that a name change makes no difference.. now how are you going to figure out how much of the tariff collected is going towards Mumbai electricity business...
I'm DAMN sure WE suburban residents are paying for ALL their other business ...
Here's an interesting point of view .. if their costs of electricity purchase goes up -- they don't HAVE to raise the tariff, they will just report a slightly lower profit in their quarterly results .. so
WHY the hell doesn't MERC understand this ????
If anyone has the gaul .. please haul these guys up...!!
REL Name change announcement...
Click this link www.rel.co.in and see what happens ...
Also, here is the link for the official announcement on the REL website here:
http://www.rel.co.in/newsmedia/pdf/REL_now_Reliance_Infrastructure.pdf
Hahaha.... Sorry, but I can't stop laughing .. one of the biggest groups in the country - and THIS is the 'sneaky' way in which they announce their name change!
Also, here is the link for the official announcement on the REL website here:
http://www.rel.co.in/newsmedia/pdf/REL_now_Reliance_Infrastructure.pdf
Hahaha.... Sorry, but I can't stop laughing .. one of the biggest groups in the country - and THIS is the 'sneaky' way in which they announce their name change!
REL becomes REL INFRA becomes REL POWER ??
OK .. so we all know that Reliance Energy first moved some of its Power Generation projects to Reliance Power (much to the 'disgust' of REL's shareholders).
Then it changed its name from Reliance Energy to Reliance Infrastructure.
Now, it seems (as per this news item from The Hindu) that the 'electricity' business of (erstwhile) Reliance Energy .. has gone to Reliance Power ???
..and all this while our own MERC fiddles a la Nero ...while we burn (the candles...)
Then it changed its name from Reliance Energy to Reliance Infrastructure.
Now, it seems (as per this news item from The Hindu) that the 'electricity' business of (erstwhile) Reliance Energy .. has gone to Reliance Power ???
..and all this while our own MERC fiddles a la Nero ...while we burn (the candles...)
REL's name change and what it means to you...
REL applied for a change of name .. to Reliance Infrastructure .. now here's the fun ..
As we all know (via RTI) that the Electricity Distribution License for Mumbai Suburbs belongs
to 'Bombay Suburban Electricity Supply Company Limited' ...
... whose name was changed to 'BSES Limited' and 'Transfer of license' was not even applied for!
... and then the company was taken over by Reliance (undivided) group and again, no Transfer was applied.
... and then the company was 'allocated' to Anil Ambani Group and again, no transfer was applied.
... and then the name was changed to Reliance Energy Ltd and again, no transfer was applied for. In fact this time MERC tells the public that no transfer is required in a name change and tries to convince the people that Companies Act 'overrides' the Electricity Act (when it reality it DOES NOT)
... and now the name is changed to Reliance Infrastructure and do you think they have applied for a Transfer ?? Keep guessing !! More on that later ...
Anyway, the other point is that everytime a name change is effected, there needs to be a major change in the 'Objects' of the company - meaning the new company may now, not really be strictly an 'electricity' company - making it even more difficult for MERC (or anyone else) to figure out the accounts and the profitability of the electricity business .. so how are we going to determine tariff ??
The spineless MERC has still not been able to get REL to submit a separate P&L (and Balance Sheet) for the Mumbai Electricity business .. so consumers will again be taken for a ride.
On one hand REL is declaring one successful Quarter after another .. with upward spiralling profits .. and on the other hand it is trying to tell MERC that it is suffering a loss on account of higher Purchase Cost .. and therefore it needs to RAISE tariff !!
How long are you going to buy this story ??
Chew on it .. as you pay higher bills this summer....
As we all know (via RTI) that the Electricity Distribution License for Mumbai Suburbs belongs
to 'Bombay Suburban Electricity Supply Company Limited' ...
... whose name was changed to 'BSES Limited' and 'Transfer of license' was not even applied for!
... and then the company was taken over by Reliance (undivided) group and again, no Transfer was applied.
... and then the company was 'allocated' to Anil Ambani Group and again, no transfer was applied.
... and then the name was changed to Reliance Energy Ltd and again, no transfer was applied for. In fact this time MERC tells the public that no transfer is required in a name change and tries to convince the people that Companies Act 'overrides' the Electricity Act (when it reality it DOES NOT)
... and now the name is changed to Reliance Infrastructure and do you think they have applied for a Transfer ?? Keep guessing !! More on that later ...
Anyway, the other point is that everytime a name change is effected, there needs to be a major change in the 'Objects' of the company - meaning the new company may now, not really be strictly an 'electricity' company - making it even more difficult for MERC (or anyone else) to figure out the accounts and the profitability of the electricity business .. so how are we going to determine tariff ??
The spineless MERC has still not been able to get REL to submit a separate P&L (and Balance Sheet) for the Mumbai Electricity business .. so consumers will again be taken for a ride.
On one hand REL is declaring one successful Quarter after another .. with upward spiralling profits .. and on the other hand it is trying to tell MERC that it is suffering a loss on account of higher Purchase Cost .. and therefore it needs to RAISE tariff !!
How long are you going to buy this story ??
Chew on it .. as you pay higher bills this summer....
Power companies make merry..
Power companies have been telling us for quite some time that they are running up losses .. at least that's what REL has always been trying to tell us.
Consequently, they keep raising the rates on account of the so-called higher purchase costs.
And now read this...
If you've noticed .. all such news is reserved for the 'stock market' oriented sites .. and the general press gets the dreary news about rising costs .. doomsday situation ... raising tariff .. etc ...
Consequently, they keep raising the rates on account of the so-called higher purchase costs.
And now read this...
If you've noticed .. all such news is reserved for the 'stock market' oriented sites .. and the general press gets the dreary news about rising costs .. doomsday situation ... raising tariff .. etc ...
R-ADAG's BIG TV (DTH) to offer special rates to REL users ...
Here's a news item that's really interesting.
First R-ADAG takes away BIG chunks of your money .... then they give you handouts .... and makes it look like a BIG deal!
(all Puns .. intended, of course !) ..
Read this here...
Incidentally, no one seems to be speaking of the fact that the original DTH license given to R-ADAG, was actually under Reliance Energy! I had mentioned this in one of my earlier posts..
Shouldn't REL shareholders be miffed at the entire business being 'surreptitiously' being moved to Reliance Entertainment (or is it Reliance Capital??)
First R-ADAG takes away BIG chunks of your money .... then they give you handouts .... and makes it look like a BIG deal!
(all Puns .. intended, of course !) ..
Read this here...
Incidentally, no one seems to be speaking of the fact that the original DTH license given to R-ADAG, was actually under Reliance Energy! I had mentioned this in one of my earlier posts..
Shouldn't REL shareholders be miffed at the entire business being 'surreptitiously' being moved to Reliance Entertainment (or is it Reliance Capital??)
MERC Case NO. 6 of 2008 - Open letter to MERC
29.4.2008
The Secretary,
MERC
Dear Sir,
This is with reference to Petition filed by M/s Reliance Energy Limited in Case No. 6 of 2008 - a hearing for which has been scheduled on 30.4.2008.
We understand that this Petition has invoked section 23 of the EA 2003 which has a great implication on consumers all over Mumbai city (http://www.mercindia.org.in/Events_Notices/Events_APR_08/Evt_H_30_04_08_1100_06_of_2008.pdf)
This matter is also of great public interest, involving scope, jurisdiction and regulatory powers of MERC - eventually resulting in an impact on tariff.
This tariff impact will affect the general public and, as such, all concerned consumers should be given an opportunity to have their say and therefore a public hearing, with due process, should be held. I am therefore, surprised that this is being heard by MERC without involving the general public.
I trust you will call for a formal general public hearing, to keep the interest of the general public in mind - and will look out for a formal announcement to this effect.
Thank you.
Warm regards,
Sandeep N. Ohri
===============================
Tamasoma jyotirgamaya...
From darkness unto light ...
===============================
Tamasoma jyotirgamaya...
From darkness unto light ...
===============================
Sent in the interest of the public good, without prejudice.
Sent in the interest of the public good, without prejudice.
Wednesday, March 12, 2008
REL changes its name to Reliance Infrastructure
Don't know how many of you saw the small news item .. but our good friends at REL have decided on another name change!
So now the Mumbai Distribution License which didn't get formally transfered to BSES Ltd .. and then which didn't get formally transfered to REL .. will now (I guess) also NOT get formally
transfered to Reliance Infrastructure... the juggernaut rolls on .. and no one has the gumption to stop it!
Given below are the various news items.
Incidentally, they transfered their entire Infrastructure business to a 100% subsidiary sometime in Oct 2007 .. and now they have decided that the parent company itself should become infrastructure oriented??
If you recall, I had mentioned that one day REL may actually exit the Mumbai electricity distribution business .. well, their focus has definitely shifted ..
Who knows .. they may be monitoring this site more closely than we think ;)
---------
http://www.thehindubusinessline.com/2008/03/11/stories/2008031152520300.htm
http://www.business-standard.com/common/news_article.php?leftnm=press&autono=316\
312
http://economictimes.indiatimes.com/News/News_By_Industry/Energy/Rel_Energy_to_b\
e_renamed_Reliance_Infrastructure/articleshow/2853132.cms
http://www.moneycontrol.com/india/news/business/relianceenergyinfrastructurebusi\
ness/relboardapprovestransferinfrabizto100subsidiary/market/stocks/article/31051\
0
(this last link mentions the transfer to a 100% subsidiary)
---------
So now the Mumbai Distribution License which didn't get formally transfered to BSES Ltd .. and then which didn't get formally transfered to REL .. will now (I guess) also NOT get formally
transfered to Reliance Infrastructure... the juggernaut rolls on .. and no one has the gumption to stop it!
Given below are the various news items.
Incidentally, they transfered their entire Infrastructure business to a 100% subsidiary sometime in Oct 2007 .. and now they have decided that the parent company itself should become infrastructure oriented??
If you recall, I had mentioned that one day REL may actually exit the Mumbai electricity distribution business .. well, their focus has definitely shifted ..
Who knows .. they may be monitoring this site more closely than we think ;)
---------
http://www.thehindubusinessline.com/2008/03/11/stories/2008031152520300.htm
http://www.business-standard.com/common/news_article.php?leftnm=press&autono=316\
312
http://economictimes.indiatimes.com/News/News_By_Industry/Energy/Rel_Energy_to_b\
e_renamed_Reliance_Infrastructure/articleshow/2853132.cms
http://www.moneycontrol.com/india/news/business/relianceenergyinfrastructurebusi\
ness/relboardapprovestransferinfrabizto100subsidiary/market/stocks/article/31051\
0
(this last link mentions the transfer to a 100% subsidiary)
---------
Saturday, February 16, 2008
My presentation at the REL hearing
I have uploaded the presentation file at the Yahoo Bijlee group site, here.
The file is a 2.8 MB pdf file - so be careful before downloading it.
Those of you who are interested in keeping abreast of such issues, may send
an email to bijlee-subscribe@yahoogroups.com and you will automatically get
such updates.
The file is a 2.8 MB pdf file - so be careful before downloading it.
Those of you who are interested in keeping abreast of such issues, may send
an email to bijlee-subscribe@yahoogroups.com and you will automatically get
such updates.
Tuesday, February 12, 2008
Response to REL's Petition to MERC
February 11, 2008
The Secretary,
Maharashtra Electricity Regulatory Commission
13th Floor, Centre No 1, World Trade Center
Cuffe Parade, Mumbai – 400 005
Fax No. : 2216 3976
Dear Sir,
Re: Suggestions / Comments on REL-D's Petition (Case 66 of 2007).
With reference to the above, we have attached our suggestions and comments.
On 13.1.2008, a Public Notice was issued by REL announcing the date of the Public Hearing as 9.2.2008. However, copies of the Petition were not made available to the public, till as late as 24.1.2008.
A news item appeared on 29.1.2008 (see Hindustan Times, Mumbai Ed.) which mentioned that MERC had stated that the all announced Public Hearings were going to be postponed. However, there was no Order available on MERC's website for us to check and verify.
There does seem to be an announcement of a new date for a hearing in the above case, on 14.2.2008. If so, we would like to be heard at the public hearing, even though it has been called for in an illegal manner and the entire conduct of it, goes against the basic tenets of public interest and good governance.
In our opinion, the law on announcement of Public hearings states that a clear three weeks notice must be given. However, no such time has been given – and the conduct of the MERC in this matter has been completely illegal. The MERC has shown scant regard for the existing laws and it has displayed an utter contempt of public/consumer interest.
Since REL has not given any email ID, we are unable to send them a copy. It is suggested that the Hon'ble MERC direct all electricity companies to accept queries by email and publish their email Ids in all public Notices. This practice of physical delivery which inconveniences rhe public MUST stop forthwith. In any case, as per past experience, REL has never provided any satisfactory response and their standard reply is “all the actions are based on directions of the MERC and all details have been submitted to MERC.”
With MERC not being able to rein in such electricity companies, there is no hope for justice to be done.
Thank you.
Sincerely,
Sandeep N. Ohri
Coordinator-Bijlee
Bombay Small Scale Industries Association
2nd Floor, Madhu Compound, Sonawala Cross Road No. 2,
Goregaon (E), Mumbai – 400065
Mobile: 98 33 09 7575
Email: snohri2004@yahoo.co.in
Read the full submission here : http://groups.yahoo.com/group/bijlee/message/1331
The Secretary,
Maharashtra Electricity Regulatory Commission
13th Floor, Centre No 1, World Trade Center
Cuffe Parade, Mumbai – 400 005
Fax No. : 2216 3976
Dear Sir,
Re: Suggestions / Comments on REL-D's Petition (Case 66 of 2007).
With reference to the above, we have attached our suggestions and comments.
On 13.1.2008, a Public Notice was issued by REL announcing the date of the Public Hearing as 9.2.2008. However, copies of the Petition were not made available to the public, till as late as 24.1.2008.
A news item appeared on 29.1.2008 (see Hindustan Times, Mumbai Ed.) which mentioned that MERC had stated that the all announced Public Hearings were going to be postponed. However, there was no Order available on MERC's website for us to check and verify.
There does seem to be an announcement of a new date for a hearing in the above case, on 14.2.2008. If so, we would like to be heard at the public hearing, even though it has been called for in an illegal manner and the entire conduct of it, goes against the basic tenets of public interest and good governance.
In our opinion, the law on announcement of Public hearings states that a clear three weeks notice must be given. However, no such time has been given – and the conduct of the MERC in this matter has been completely illegal. The MERC has shown scant regard for the existing laws and it has displayed an utter contempt of public/consumer interest.
Since REL has not given any email ID, we are unable to send them a copy. It is suggested that the Hon'ble MERC direct all electricity companies to accept queries by email and publish their email Ids in all public Notices. This practice of physical delivery which inconveniences rhe public MUST stop forthwith. In any case, as per past experience, REL has never provided any satisfactory response and their standard reply is “all the actions are based on directions of the MERC and all details have been submitted to MERC.”
With MERC not being able to rein in such electricity companies, there is no hope for justice to be done.
Thank you.
Sincerely,
Sandeep N. Ohri
Coordinator-Bijlee
Bombay Small Scale Industries Association
2nd Floor, Madhu Compound, Sonawala Cross Road No. 2,
Goregaon (E), Mumbai – 400065
Mobile: 98 33 09 7575
Email: snohri2004@yahoo.co.in
Read the full submission here : http://groups.yahoo.com/group/bijlee/message/1331
Tuesday, January 29, 2008
MERC forced to postpone public hearings
Yup, you read that right !
Today's Hindustan Times (Jan 29, Mumbai ed., page 7) has reported that MERC has postponed the public hearings as the electricity companies had not made available (the printed copies of) their Petition books, to the public, as per dates mentioned in their Public Notices.
In particular REL is a defaulter - the Public Notice was issued on Jan 13th and the books were made available as late as Jan 24th, at some of their offices mentioned in their public notice.
Which means that if MERC has to announce a new date, it has to give another THREE weeks notice - hope they will follow their own laws ;)
Meanwhile, the REL petition has a whole lotta misleading and false data - I think legal action should be taken against them for giving incorrect data under affidavit ...
Watch this space for more ...
Today's Hindustan Times (Jan 29, Mumbai ed., page 7) has reported that MERC has postponed the public hearings as the electricity companies had not made available (the printed copies of) their Petition books, to the public, as per dates mentioned in their Public Notices.
In particular REL is a defaulter - the Public Notice was issued on Jan 13th and the books were made available as late as Jan 24th, at some of their offices mentioned in their public notice.
Which means that if MERC has to announce a new date, it has to give another THREE weeks notice - hope they will follow their own laws ;)
Meanwhile, the REL petition has a whole lotta misleading and false data - I think legal action should be taken against them for giving incorrect data under affidavit ...
Watch this space for more ...
Wednesday, January 23, 2008
Raving and Ranting ...
I'm really angry .. Bear with me on this post ... this is just a general rant!
My "good" friends at the MERC have just no concern for the public - they have announced a slew of public hearings within the next few weeks - for raising electricity tariff.
What really p!sses me off is that these guys are allowed to get away with doing something like this..
They think that the public has enough of expertise and time to do a due diligence on 6 hearings (MahaGenco, MahaTransco, MahaVitaran, Tata, BEST, REL) - which means studying about 3,000 pages of technical documentation .. and then filing one copy with each company and six copies with MERC .. and then appearing at these public hearings ...
What the bloody hell ....
In this age of "consumerism" - the customer is supposed to be God, right?
Crap .. according to MERC, the customer is LAST on their list - though the laws that formed the MERC state that consumer interest has to be protected.
MERC is supposed to be a Regulator of Electricity so that competition is promoted and consumer interest is protected .. and also to ensure fair supply of electricity, etc.
Look at what TRAI has done - and mobile tariffs are continuously going down ..
Now look at what MERC has done .. and electricity tariffs are continuously going up !!
Well, as i said .. this was just a general rant - to let off some steam ... feel better already :)
My "good" friends at the MERC have just no concern for the public - they have announced a slew of public hearings within the next few weeks - for raising electricity tariff.
What really p!sses me off is that these guys are allowed to get away with doing something like this..
They think that the public has enough of expertise and time to do a due diligence on 6 hearings (MahaGenco, MahaTransco, MahaVitaran, Tata, BEST, REL) - which means studying about 3,000 pages of technical documentation .. and then filing one copy with each company and six copies with MERC .. and then appearing at these public hearings ...
What the bloody hell ....
In this age of "consumerism" - the customer is supposed to be God, right?
Crap .. according to MERC, the customer is LAST on their list - though the laws that formed the MERC state that consumer interest has to be protected.
MERC is supposed to be a Regulator of Electricity so that competition is promoted and consumer interest is protected .. and also to ensure fair supply of electricity, etc.
Look at what TRAI has done - and mobile tariffs are continuously going down ..
Now look at what MERC has done .. and electricity tariffs are continuously going up !!
Well, as i said .. this was just a general rant - to let off some steam ... feel better already :)
MERC Public Hearings - Take Action NOW !!!
The consumer-unfriendly MERC has announced a whole series of Public Hearings - just so that you can be charged MORE for electricity, from April 1st.
Your April bills will come in the first week of May and by then it will be "too late" to file any appeal with MERC - 45 day period from date of Order will be over!
It is better to raise your voice NOW.
If you don't know what to do, don't worry - I have made a list of MERC's violations - and illegalities in the conduct of these hearings - and have posted these files at the BIJLEE Yahoo Group site in this message... http://groups.yahoo.com/group/bijlee/message/1266
Just make the necessary changes (highlighted in BLUE) and courier it to the respective companies as well as to MERC (MERC address is in the document).
Though MERC does not permit email submissions, you can take a chance and also email it to mercindia@mercindia.org.in - and please mark me a copy at snohri2004@yahoo.co.in so that I will be able to take it up with MERC.
The message also has 2 sample pdf files, of my previous submissions, for your reference - so that you can see what a finished output will look like.
Please send these as soon as possible, as the following are the dates:
Jan 21 - MahaTransco (Last date for filing suggestions was Jan 15)
Feb 4 - MahaGenco (Last date... is Jan 29)
Feb 6 - BEST (Last date ... is Feb 1)
Feb 6 - TPC (Last date .. is Jan 30)
Feb 9 - REL (Last date ... is Feb 04)
Feb 18 - Pune - MahaVitaran (Last date .. is Feb 2)
Feb 21 - CBD Belapur - MahaVitaran (Last date .. is Feb 2)
Take action NOW - or pay higher bills later ...
"For evil to flourish, good people have to do nothing .. and evil shall flourish" - Edmund Burke
Your April bills will come in the first week of May and by then it will be "too late" to file any appeal with MERC - 45 day period from date of Order will be over!
It is better to raise your voice NOW.
If you don't know what to do, don't worry - I have made a list of MERC's violations - and illegalities in the conduct of these hearings - and have posted these files at the BIJLEE Yahoo Group site in this message... http://groups.yahoo.com/group/bijlee/message/1266
Just make the necessary changes (highlighted in BLUE) and courier it to the respective companies as well as to MERC (MERC address is in the document).
Though MERC does not permit email submissions, you can take a chance and also email it to mercindia@mercindia.org.in - and please mark me a copy at snohri2004@yahoo.co.in so that I will be able to take it up with MERC.
The message also has 2 sample pdf files, of my previous submissions, for your reference - so that you can see what a finished output will look like.
Please send these as soon as possible, as the following are the dates:
Jan 21 - MahaTransco (Last date for filing suggestions was Jan 15)
Feb 4 - MahaGenco (Last date... is Jan 29)
Feb 6 - BEST (Last date ... is Feb 1)
Feb 6 - TPC (Last date .. is Jan 30)
Feb 9 - REL (Last date ... is Feb 04)
Feb 18 - Pune - MahaVitaran (Last date .. is Feb 2)
Feb 21 - CBD Belapur - MahaVitaran (Last date .. is Feb 2)
Take action NOW - or pay higher bills later ...
"For evil to flourish, good people have to do nothing .. and evil shall flourish" - Edmund Burke
Thursday, January 17, 2008
REL POWER IPO - Poor Retail Investors !!
17.1.2008
A friend of mine sent this in .. chew on it before you subscribe to the IPO...
--------------------
Reliance Power Limited IPO
Opens: 15th January 2008.
Closes: 18th January 2008.
Price Band: Rs 405 to Rs 450.
Price Band for Retail Investors: Rs 385 to Rs 430. (Rs 20 discount).
Number of shares offered to public: 22,80,00,000 ( 22.8 crore).
+ Number of shares to be subscribed by promoters: 3,20,00,000 ( 3.2
crore).
Total new shares issued (sum of above two) = (26 crore)
Number of shares for retail investors: 6,84,00000. (6.84 crore).
Issue size (public) = (22.8-6.84)X 450 + (6.84X 430) = 7182+2941.2
= Rs 10123.2 crore.
Number of shares outstanding pre-IPO: 200 crore.
Number of shares outstanding post-IPO: 226 crore.
=======================================
Retail Investors and NII can apply with Rs 115 margin per share. (The
details of this have already been discussed in earlier posts).
Maximum application possible in retail category = 225 shares.
=======================================
Already, a lot has been discussed about Reliance Power and its
business (which will be there a few years from now).
This is an extremely rare case where SEBI has allowed a company with
almost 0 revenues, to raise money via an IPO.
If this was an IPO by some smaller group, it would have been 100%
rejected by SEBI for having no business.
=======================================
Business:
The company claims that it will be developing power generation
projects of 28200 MW over the next decade.
According to the IPO RHP, some of the projects that it will be
developing are:
-Rosa-I (to be commissioned in March 2010) - 600 MW - Coal based.
-Butibori (to be commissioned in June 2010) - 300 MW - Coal based.
-Rosa-II (to be commissioned in September 2010) - 600 MW - Coal based.
-Shahpur Gas (to be commissioned in March 2011) - 2800 MW - Gas
based.
-Shahpur Coal (to be commissioned in December 2011) - 1200 MW - Coal
based.
-Dadri (to be commissioned in March 2013) - 7480 MW - Gas based.
-Krishnapatnam (to be commissioned in September 2013) - 4000 MW -
Coal based.
-Urthing Sobla (to be commissioned in March 2014) - 400 MW -
Hydropower based.
-Tato II (to be commissioned in March 2014) - 700 MW - Hydropower
based.
-MP Power (to be commissioned in July 2014) - 3960 MW - Coal based.
-Siyom (to be commissioned in March 2015) - 1000 MW - Hydropower
based.
-Kalai II (to be commissioned in March 2016) - 1200 MW - Hydropower
based.
-Sasan (to be commissioned in April 2016) - 3960 MW - Coal based.
If everything goes as planned, capacity of Reliance Power at end of
each year till 2016 will be:
2008: 0 MW.
2009: 0 MW.
2010: 1500 MW.
2011: 5500 MW.
2012: 5500 MW.
2013: 16980 MW.
2014: 22040 MW.
2015: 23040 MW.
2016: 28200 MW.
=======================================
Other Similar Companies:
I can think of two companies in the power generation sector that
Reliance Power can be compared with:
NTPC and Tata Power.
NTPC has current capacity of 28000 MW and has target to achieve 66000
MW by 2017. (See this thread on NTPC).
Tata Power has current capacity of 2300 MW.
It will be adding 10000 MW of capacity more by 2012. Thus, it will
have a capacity of around 12300 MW by 2012 end.
The additions will all be coal based.
-Mundra Ultra Mega Power Project -4000 MW.
-Power plants in Maharastra - 3000 MW.
-Captive power plants for Tata Steel - 2000 MW
-Maithon Power Plant at Jharkhand - 1000 MW.
Tata Power also has other smaller business and also wants to enter
shipping and logistics. Besides that Tata Power has investments
valued at Rs 400+ per share of Tata Power. This works out to be Rs
10000 crore.
Around 2012 - 2013, both Tata Power is expected to have similar
capacity as Reliance Power.
The interesting thing is at current price of Rs 1457, Tata Power is
valued at just Rs 30000 crore. Remove Rs 10000 crore of investments
and you can have it only for Rs 20000 crore.
At Rs 900, Reliance Power will have market value of 200000
crores....6.67 times that of Tata Power. .
========================================
Financials:
With 2300 MW capacity, Tata Power made standalone profit of Rs 700
crore in FY 2007.
With 28000 MW capacity, NTPC made standalone profit of Rs 6900 crore
in FY 2007.
Lets assume Reliance Power turns out to be much more efficient than
these two companies. Add to that increased power rates.
With 28200 capacity, assume Reliance Power makes Rs 15000 crore of
net profit in 2016-2017. Power companies are considered as utilities
and worldwide trade at 10-15 times their earnings.
Lets assume 15 times ratio for Reliance Power in 2016.
What will be its market value?
15000 X 15 = Rs 225000 crore or Rs 995 per share.
This is an optimistic view:
-there will be no further equity dilution till 2016.
-assuming nearly twice as much efficiency as NTPC.
-that all projects will be completed before 2016 end.
-the company would have paid back all debt by then and interest costs
would be in similar range as NTPC.
(NTPC already has established 28000 MW capacity and comparatively
much lesser interest costs. (NTPC's P&L account states Rs 1800
interest cost for FY 2007).
So what about the debt?
The RHP mentions estimated cost of six projects Rosa I, Rosa II,
Butibori, Sasan, Shahpur Coal, Urthing Sobla as Rs 30000 crore+.
Analysts estimate that Reliance Power will need Rs 70000 crore of
debt to finance its projects which are estimated to cost 100000
crore+.
Rs 70000 crore of debt is not going to come at 2% interest rate. Even
a 6% interest would mean an annual interest cost of Rs 4200 crore.
Only in 2013, the company's capacity will cross 10000 MW. Thus, I do
not expect any major debt repayment before 2014. If things don't go
as planned, the debt burden will make a mockery of the balance sheet.
With Rs 12000 crore raised in equity and Rs 70000 crore of debt,
these whole business will become a high-risk venture.
Any unforeseen delay/derailment of plans may create major problems
for this company.
========================================
Reliance Power - The Overlooked Fact:
Is Reliance Power just "Reliance Power"?
No.
It is actually "Reliance Power Limited" - a limited company.
So what does this mean for Reliance Power Limited?
It means if in the rare case, the calculations of the management go
wrong and the company somehow goes to insolvency, none of the
shareholders will lose anything expect the value of the shares.
If you are a share holder of Reliance Power and it goes into
insolvency (unable to pay back debts), what do you stand to lose?
Rs 430 per share.
Lot of money....right?
What does Anil Ambani's AAA Project or REL lose?
Both of them had got their 45% (post-IPO) stake for Rs 1000 crore
each. Plus they will each subscribe to 1.6 crore shares each at Rs
450 in the IPO......which works out to be Rs 720 crore.
Thus, AAA Project will be getting 101.6 crore shares of Reliance
Power for Rs 1720 crore and REL will be getting 101.6 crore shares of
Reliance Power for Rs 1720 crore.
Little less than Rs 17 per share.
This is what both the promoters are risking in this project....Rs 17
per share; while investors will be risking Rs 450 per share.
This is exactly the reason why Reliance Power was created.
First, by contributing just Rs 1720 crore each to Reliance Power, the
promoters have shifted all risk to investors.
Second, by getting 45% stake (in REL's projects) to AAA Project for a
mere Rs 1000 crore, AAA Projects (and Anil Ambani) have created
wealth out of thin air.
Anil Ambani's Rs 1000 crore investment will be worth Rs 100000 crore
when Reliance Power lists at Rs 900.
If the gamble works, the promoters (holding 90% stake in Reliance
Power) will be worth billions of dollars.
If the gamble doesn't work, the promoters will lose Rs 1720 crore
each and investors will lose Rs 10000+ crore which they will be
paying for a mere 10% stake in Reliance Power.
What a way to create wealth...!!!....I don't have words to describe
the brilliance of Anil Ambani's plans....
========================================
So what will I do with this IPO?
Firstly, I will subscribe to it, not because I think it is a good
company or is offering great value at Rs 430, but because I am in
this market to make money.
The markets are in such a frenzy, nobody bothers about valuations
anymore........not even QIB and other institutional investors.
Everyone knows that Reliance Power will list at a premium and thus
everyone will apply....valuations can wait for some other day.....
Everyone should wait till last day and apply for it. Just check the
subscription levels by 11 AM on last day.
========================================
What will I do post-listing?
For bigger IPO's like Power Grid and Mundra Port, I have followed a
sell-half-keep-half strategy.
Assuming listing at Rs 900, for Reliance Power, I will follow sell-
all-keep-none strategy.
First, other companies are much cheaper.
Why should I keep a company valued at Rs 200000 crore -
when another company (with similar capacity by 2013) is available at
Rs 30000 crore with much smaller debt burden and Rs 10000 crore worth
of investments...........referring to Tata Power.
If Reliance Power (at Rs 900) is available for Rs 200000 crore, why
not buy NTPC for a similar price......Rs 225000 crore. NTPC plans to
have a capacity of 66000 MW in 2017, while Reliance Power will have
28200 MW capacity in 2016.
Second, the risk is higher than other existing companies.
With marginally cash flows for next 5 years and Rs 70000+ crore of
debt, the risk for Reliance Power is high. Tata Power and NTPC have
existing cash flows to handle expansions....Reliance Power does not.
Third and the biggest factor is....the valuation of the company
doesn't make much sense.
Why should Reliance Power be valued at Rs 200000 crore, when in
highly optimistic scenario, it will not make more than Rs 15000 crore
of profit in 2016? Even if it touches that figure of Rs 15000 crore,
its market value in 2016 will not be much more than 225000-300000
crore. (if given a 15-20 times multiple).
A fixed deposit will make more money than that in 8 years.....and
that too without any risk.
Also, I got the optimistic Rs 15000 crore figure by assuming two
times margins as NTPC.
The fact is..... at least till 2014, Reliance Power will still be
carrying most of its Rs 70000 crore debt and its interest costs will
squeeze margins to a large extent.
========================================
Final verdict:
Apply.
I will be selling all shares at 9:55..........not even waiting for a
better price.
If you want to try for a better price, hold at your own risk.
The level of insanity in the markets is at a high...
Value and risk mean nothing today.....price and profit are the
keywords.
Who knows.....the stock may got to Rs 1100 or more.
========================================
Addendum:
Reliance Power may win more projects in the future.
However, it is unlikely that any new project that Reliance Power gets
will be commissioned before 2012. Additional projects will also bring
additional costs too.
It doesn't make much sense to consider future projects before they
are actually won.
Also, Reliance Power is winning projects by offering very low rates -
another factor that will decrease margins and increase risks for the
company.
For example, in case of Krishnapatnam Ultra Mega Power Project,
Reliance Power won with a bid of Rs 2.33 per unit.
L&T had bid Rs 2.69 per unit and Sterlite had bid Rs 4.19 per unit.
Such aggressive pricing may backfire if costs rise due to some
unexpected factors.
Regards,
Omkar Barve
Associate
Keynote Corporate Services Limited
4th Floor, Balmer Lawrie Building,
J. N. Heredia Marg,
Ballard Estate,
Mumbai - 400001
A friend of mine sent this in .. chew on it before you subscribe to the IPO...
--------------------
Reliance Power Limited IPO
Opens: 15th January 2008.
Closes: 18th January 2008.
Price Band: Rs 405 to Rs 450.
Price Band for Retail Investors: Rs 385 to Rs 430. (Rs 20 discount).
Number of shares offered to public: 22,80,00,000 ( 22.8 crore).
+ Number of shares to be subscribed by promoters: 3,20,00,000 ( 3.2
crore).
Total new shares issued (sum of above two) = (26 crore)
Number of shares for retail investors: 6,84,00000. (6.84 crore).
Issue size (public) = (22.8-6.84)X 450 + (6.84X 430) = 7182+2941.2
= Rs 10123.2 crore.
Number of shares outstanding pre-IPO: 200 crore.
Number of shares outstanding post-IPO: 226 crore.
=======================================
Retail Investors and NII can apply with Rs 115 margin per share. (The
details of this have already been discussed in earlier posts).
Maximum application possible in retail category = 225 shares.
=======================================
Already, a lot has been discussed about Reliance Power and its
business (which will be there a few years from now).
This is an extremely rare case where SEBI has allowed a company with
almost 0 revenues, to raise money via an IPO.
If this was an IPO by some smaller group, it would have been 100%
rejected by SEBI for having no business.
=======================================
Business:
The company claims that it will be developing power generation
projects of 28200 MW over the next decade.
According to the IPO RHP, some of the projects that it will be
developing are:
-Rosa-I (to be commissioned in March 2010) - 600 MW - Coal based.
-Butibori (to be commissioned in June 2010) - 300 MW - Coal based.
-Rosa-II (to be commissioned in September 2010) - 600 MW - Coal based.
-Shahpur Gas (to be commissioned in March 2011) - 2800 MW - Gas
based.
-Shahpur Coal (to be commissioned in December 2011) - 1200 MW - Coal
based.
-Dadri (to be commissioned in March 2013) - 7480 MW - Gas based.
-Krishnapatnam (to be commissioned in September 2013) - 4000 MW -
Coal based.
-Urthing Sobla (to be commissioned in March 2014) - 400 MW -
Hydropower based.
-Tato II (to be commissioned in March 2014) - 700 MW - Hydropower
based.
-MP Power (to be commissioned in July 2014) - 3960 MW - Coal based.
-Siyom (to be commissioned in March 2015) - 1000 MW - Hydropower
based.
-Kalai II (to be commissioned in March 2016) - 1200 MW - Hydropower
based.
-Sasan (to be commissioned in April 2016) - 3960 MW - Coal based.
If everything goes as planned, capacity of Reliance Power at end of
each year till 2016 will be:
2008: 0 MW.
2009: 0 MW.
2010: 1500 MW.
2011: 5500 MW.
2012: 5500 MW.
2013: 16980 MW.
2014: 22040 MW.
2015: 23040 MW.
2016: 28200 MW.
=======================================
Other Similar Companies:
I can think of two companies in the power generation sector that
Reliance Power can be compared with:
NTPC and Tata Power.
NTPC has current capacity of 28000 MW and has target to achieve 66000
MW by 2017. (See this thread on NTPC).
Tata Power has current capacity of 2300 MW.
It will be adding 10000 MW of capacity more by 2012. Thus, it will
have a capacity of around 12300 MW by 2012 end.
The additions will all be coal based.
-Mundra Ultra Mega Power Project -4000 MW.
-Power plants in Maharastra - 3000 MW.
-Captive power plants for Tata Steel - 2000 MW
-Maithon Power Plant at Jharkhand - 1000 MW.
Tata Power also has other smaller business and also wants to enter
shipping and logistics. Besides that Tata Power has investments
valued at Rs 400+ per share of Tata Power. This works out to be Rs
10000 crore.
Around 2012 - 2013, both Tata Power is expected to have similar
capacity as Reliance Power.
The interesting thing is at current price of Rs 1457, Tata Power is
valued at just Rs 30000 crore. Remove Rs 10000 crore of investments
and you can have it only for Rs 20000 crore.
At Rs 900, Reliance Power will have market value of 200000
crores....6.67 times that of Tata Power. .
========================================
Financials:
With 2300 MW capacity, Tata Power made standalone profit of Rs 700
crore in FY 2007.
With 28000 MW capacity, NTPC made standalone profit of Rs 6900 crore
in FY 2007.
Lets assume Reliance Power turns out to be much more efficient than
these two companies. Add to that increased power rates.
With 28200 capacity, assume Reliance Power makes Rs 15000 crore of
net profit in 2016-2017. Power companies are considered as utilities
and worldwide trade at 10-15 times their earnings.
Lets assume 15 times ratio for Reliance Power in 2016.
What will be its market value?
15000 X 15 = Rs 225000 crore or Rs 995 per share.
This is an optimistic view:
-there will be no further equity dilution till 2016.
-assuming nearly twice as much efficiency as NTPC.
-that all projects will be completed before 2016 end.
-the company would have paid back all debt by then and interest costs
would be in similar range as NTPC.
(NTPC already has established 28000 MW capacity and comparatively
much lesser interest costs. (NTPC's P&L account states Rs 1800
interest cost for FY 2007).
So what about the debt?
The RHP mentions estimated cost of six projects Rosa I, Rosa II,
Butibori, Sasan, Shahpur Coal, Urthing Sobla as Rs 30000 crore+.
Analysts estimate that Reliance Power will need Rs 70000 crore of
debt to finance its projects which are estimated to cost 100000
crore+.
Rs 70000 crore of debt is not going to come at 2% interest rate. Even
a 6% interest would mean an annual interest cost of Rs 4200 crore.
Only in 2013, the company's capacity will cross 10000 MW. Thus, I do
not expect any major debt repayment before 2014. If things don't go
as planned, the debt burden will make a mockery of the balance sheet.
With Rs 12000 crore raised in equity and Rs 70000 crore of debt,
these whole business will become a high-risk venture.
Any unforeseen delay/derailment of plans may create major problems
for this company.
========================================
Reliance Power - The Overlooked Fact:
Is Reliance Power just "Reliance Power"?
No.
It is actually "Reliance Power Limited" - a limited company.
So what does this mean for Reliance Power Limited?
It means if in the rare case, the calculations of the management go
wrong and the company somehow goes to insolvency, none of the
shareholders will lose anything expect the value of the shares.
If you are a share holder of Reliance Power and it goes into
insolvency (unable to pay back debts), what do you stand to lose?
Rs 430 per share.
Lot of money....right?
What does Anil Ambani's AAA Project or REL lose?
Both of them had got their 45% (post-IPO) stake for Rs 1000 crore
each. Plus they will each subscribe to 1.6 crore shares each at Rs
450 in the IPO......which works out to be Rs 720 crore.
Thus, AAA Project will be getting 101.6 crore shares of Reliance
Power for Rs 1720 crore and REL will be getting 101.6 crore shares of
Reliance Power for Rs 1720 crore.
Little less than Rs 17 per share.
This is what both the promoters are risking in this project....Rs 17
per share; while investors will be risking Rs 450 per share.
This is exactly the reason why Reliance Power was created.
First, by contributing just Rs 1720 crore each to Reliance Power, the
promoters have shifted all risk to investors.
Second, by getting 45% stake (in REL's projects) to AAA Project for a
mere Rs 1000 crore, AAA Projects (and Anil Ambani) have created
wealth out of thin air.
Anil Ambani's Rs 1000 crore investment will be worth Rs 100000 crore
when Reliance Power lists at Rs 900.
If the gamble works, the promoters (holding 90% stake in Reliance
Power) will be worth billions of dollars.
If the gamble doesn't work, the promoters will lose Rs 1720 crore
each and investors will lose Rs 10000+ crore which they will be
paying for a mere 10% stake in Reliance Power.
What a way to create wealth...!!!....I don't have words to describe
the brilliance of Anil Ambani's plans....
========================================
So what will I do with this IPO?
Firstly, I will subscribe to it, not because I think it is a good
company or is offering great value at Rs 430, but because I am in
this market to make money.
The markets are in such a frenzy, nobody bothers about valuations
anymore........not even QIB and other institutional investors.
Everyone knows that Reliance Power will list at a premium and thus
everyone will apply....valuations can wait for some other day.....
Everyone should wait till last day and apply for it. Just check the
subscription levels by 11 AM on last day.
========================================
What will I do post-listing?
For bigger IPO's like Power Grid and Mundra Port, I have followed a
sell-half-keep-half strategy.
Assuming listing at Rs 900, for Reliance Power, I will follow sell-
all-keep-none strategy.
First, other companies are much cheaper.
Why should I keep a company valued at Rs 200000 crore -
when another company (with similar capacity by 2013) is available at
Rs 30000 crore with much smaller debt burden and Rs 10000 crore worth
of investments...........referring to Tata Power.
If Reliance Power (at Rs 900) is available for Rs 200000 crore, why
not buy NTPC for a similar price......Rs 225000 crore. NTPC plans to
have a capacity of 66000 MW in 2017, while Reliance Power will have
28200 MW capacity in 2016.
Second, the risk is higher than other existing companies.
With marginally cash flows for next 5 years and Rs 70000+ crore of
debt, the risk for Reliance Power is high. Tata Power and NTPC have
existing cash flows to handle expansions....Reliance Power does not.
Third and the biggest factor is....the valuation of the company
doesn't make much sense.
Why should Reliance Power be valued at Rs 200000 crore, when in
highly optimistic scenario, it will not make more than Rs 15000 crore
of profit in 2016? Even if it touches that figure of Rs 15000 crore,
its market value in 2016 will not be much more than 225000-300000
crore. (if given a 15-20 times multiple).
A fixed deposit will make more money than that in 8 years.....and
that too without any risk.
Also, I got the optimistic Rs 15000 crore figure by assuming two
times margins as NTPC.
The fact is..... at least till 2014, Reliance Power will still be
carrying most of its Rs 70000 crore debt and its interest costs will
squeeze margins to a large extent.
========================================
Final verdict:
Apply.
I will be selling all shares at 9:55..........not even waiting for a
better price.
If you want to try for a better price, hold at your own risk.
The level of insanity in the markets is at a high...
Value and risk mean nothing today.....price and profit are the
keywords.
Who knows.....the stock may got to Rs 1100 or more.
========================================
Addendum:
Reliance Power may win more projects in the future.
However, it is unlikely that any new project that Reliance Power gets
will be commissioned before 2012. Additional projects will also bring
additional costs too.
It doesn't make much sense to consider future projects before they
are actually won.
Also, Reliance Power is winning projects by offering very low rates -
another factor that will decrease margins and increase risks for the
company.
For example, in case of Krishnapatnam Ultra Mega Power Project,
Reliance Power won with a bid of Rs 2.33 per unit.
L&T had bid Rs 2.69 per unit and Sterlite had bid Rs 4.19 per unit.
Such aggressive pricing may backfire if costs rise due to some
unexpected factors.
Regards,
Omkar Barve
Associate
Keynote Corporate Services Limited
4th Floor, Balmer Lawrie Building,
J. N. Heredia Marg,
Ballard Estate,
Mumbai - 400001
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