Institutional Equities - Online Share Trading
Institutional Equities - Online Share Trading
Institutional Equities - Online Share Trading
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<strong>Institutional</strong> <strong>Equities</strong><br />
Exhibit 11: Regulatory assets<br />
Revenue gap<br />
Approved<br />
(Rsbn)<br />
Remarks<br />
Regulatory assets (FY05-FY09) 7.32 Already approved in past tariff orders but recovery was deferred<br />
Incremental revenue gap of FY09 0.96 -<br />
Incremental revenue Gap of FY10& 11 13.74 Impact of tariff stay and subsidy<br />
Impact of ATE order 0.91 ATE allowed carrying cost at SBI PLR(against 6% considered by MERC)<br />
Capitalisation 0.23 Recognising past year’s capitalisation<br />
Total gap 23.16 -<br />
Source: Company, Nirmal Bang <strong>Institutional</strong> <strong>Equities</strong> Research<br />
Exhibit 12: Power procurement plan<br />
Medium-term<br />
Source Duration Capacity(MW) Levelised tariff (Rs/Unit)<br />
KSK Energy FY12-14(3 years) 260 4.85<br />
Abhijeet FY12-14(3 years ) 55 4.8<br />
R-Power (Butibori) FY13-14(3 years) 135 4.8<br />
DTPS Till FY17 500 Regulated<br />
Total - 950 -<br />
Source: Company, Nirmal Bang <strong>Institutional</strong> <strong>Equities</strong> Research<br />
Exhibit 13: Power cost break-up<br />
2.81 3.76 4.26 5.43 7.40 6.59 6.40<br />
1.1<br />
1.11 1.11 1.16 1.28 1.53 1.64<br />
1.76<br />
2.72 3.22 4.36 6.12 5.06 4.76<br />
FY05 FY06 FY07 FY08 FY09 FY10 FY11<br />
Power purchase Distribution cost<br />
Source: Company, Nirmal Bang <strong>Institutional</strong> <strong>Equities</strong> Research<br />
Delhi discoms area tariff hike by 21.7% to ease liquidity crunch<br />
The company has a combined 49% stake in BSES Rajdhani Power Limited (BRPL) and BSES Yamuna Power<br />
Limited (BYPL) units of Delhi power distribution business, which have regulated equity of around Rs22bn. Recently,<br />
DERC hiked the tariff by 21.7% after six years (last tariff hike of 6.6% was witnessed in 2005-06), which comes as a<br />
big respite for Delhi power distribution units (BRPL and BYPL) as they were facing a severe liquidity crunch due to<br />
rising gap between power cost and tariff charged to consumers. There was also a steep increase in debt level in<br />
order to fund capex and power procurement cost. We believe this move (the tariff hike) is a major positive towards<br />
improving the deteriorated financials of Delhi discoms and we expect further tariff hikes to happen, in tranches, in<br />
order to recover accumulated revenue deficit and ease the company’s liquidity position. We have valued Delhi<br />
power distribution business at Rs31/share (implied P/BV of 0.75x ) at a CoE of 13.5%, given the fixed return of 16%<br />
on regulated equity.<br />
45 Reliance Infra
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