Opg Power Ventures Share Discussion Threads

[turbocharge] 22/10/2021 14:49

On the other hand you could be right, maybe there's a seller out there and once he's finished we should see the share price moving up?

[turbocharge] 22/10/2021 14:47

Doesn't explain why I'm only being offered 11.7p for selling a smaller holding while the 240k is achieving 11.875p. Could it simply be an earlier buy order when the price was lower being filled?

[dave4545] 22/10/2021 14:06

I reckon the 240k blocks are the worked sales even though they are at a very high price.

[dave4545] 22/10/2021 11:24

100k buy 125k buy, loads of smaller buys

And you can still buy below 12p, surely the mm's will get low on stock at this level if buying continues

[dave4545] 21/10/2021 08:44

Online is good albeit price is way lower again

11.5-12p

11.8-11.96p online

[dave4545] 19/10/2021 21:33

PPVN

Thanks.

Interims will make interesting reading then. Shame they are still maybe 5-6 weeks away unless they bring them out early.

[andycapp1] 19/10/2021 13:42

They’ve part ownership of 50MW of solar. Their equity is not worth much. Can’t sell it because, like most things Gupta, it’s bound in with others which makes monetising it complex.

[haroldthegreat] 19/10/2021 11:07

Did we ever make any money out of solar power . I would have thought solar power would have been a no brainer in India .a quick look at the recent results shows they have been trying to get rid of it but failed . Can somebody who follows this company provide a simple summary of what happened to this ?? Good idea !

[ppvn] 19/10/2021 10:40

Nice to see a lot of the old faces are still here. I've not currently got any shares here but looked a bit more closely after the most recent results which really were fantastic - and on the face of it looked like a great entry point.

A couple of points though that are currently causing me pause for thought - the first and biggest by far is the current price for coal that OPG will be paying. From their average of around 4.2k INR at the gate it's not clear to me at this point in time what price they would be paying now - but wholesale prices are up c.4x without freight. Reading between the lines despite their excellent cash generation the decision to omit a dividend this year does make me wonder about pricing - and thanks for the link jozo since that does imply that they are at least able to pass on pricing to their customers. As of September the coal price was c.3x higher than 2020 so would tie-in to that.

The other point relates to debt and whilst their debt restructuring reduced the headline "net debt" figure what really happened was that they shifted a large portion from current liabilities into non-current liabilities. Debt free should still be around 2025.

Anyway I'll keep an eye out here as I've always liked this one and if coal comes off again its an absolute steal.

[turbocharge] 18/10/2021 13:49

I think tangedco is one of the principal customers of OPG, if I remember correctly from the last OPG presentation. So could be positive for OPG?

[jozo] 18/10/2021 07:51

Not a particularly clear/great article but it seems to suggest that tangedco is purchasing some power (15m units) in TN from power providers at as much as Rs 17 per unit.No idea if this is relevant to OPG but is certainly > 3 times what OPG currently receive.https://www.google.com/amp/s/www.thenewsminute.com/article/no-power-cuts-tamil-nadu-now-says-tangedco-amid-coal-shortage-156401%3famp

[the original goldbug] 17/10/2021 21:34

Coal price will mean cash flows will be lower for the current year, still it’s reasonable to expect they will more or less clear the debt by this time next year.

[dave4545] 17/10/2021 21:16

Well they managed in a shocking year of covid ravaged India to reduce debt by a whopping £37 million

To leave £16 mil so I was just guessing if things had improved as Covid numbers had dropped they might be debt free now if they continue that rate of debt reduction.

[andycapp1] 17/10/2021 08:30

Any price rises should be offset by a recovery in turnover!! Whaat are you talking about? You won’t ameliorate that by amortising it across your fixed cost base. They won’t be anywhere near debt free in the current environment. If you want to hold, do so by fingernails and hope coal falls. Otherwise go buy a fund and leave it to a pro!!

[turbocharge] 15/10/2021 16:44

I notice that OPG passes 10 out of 10 of the checklist rules to identify Neglected Companies. These companies are under-researched by analysts and potentially misunderstood by investors:

1 Brokers <= 2
2 EPS Growth TTM > Industry Group Median%
3 P/E TTM < Industry Group Median
4 Net Mgn TTM > Industry Group Median%
5 P/B Latest < 3
6 ROE 5y Avg > Industry Group Median%
7 Mkt Cap GBP > 25m
8 Primary List == 1
9 Industry Group not in "Banking Services" or "Collective Investments"
10 Qualifies in the top 200 stocks sorted by EPS Growth Descending

[dave4545] 15/10/2021 14:09

Any price rises should be offset by a recovery in turnover.

If cash generation has remained similar then it could be possible OPG are now debt free.

Would be nice if they are and they put out a Rns for it

[turbocharge] 15/10/2021 13:57

Edison research (30 Sep 21) says

"The key metric for a thermal power generator is the dark spread, the margin over the coal price. OPG primarily uses Indonesian coal, where prices have more than doubled in recent months. Freight costs have also been rising. OPG is partially covered through fixed price agreements for coal and freight in FY22 but remains exposed to market fluctuations for the unhedged element. Hence management feels unable to provide forward guidance until there is greater stability.````'

Any thoughts on coal price trend and how it might impact OPG?

Also noted:

Bull
◼ Strong cash flow generation from a mature asset base (no development risk) and rapidly deleveraging balance sheet.
◼ Exposure to the high-growth Indian economy.
◼ Opportunities from nascent renewables business funded through solar investment disposal.

Bear
◼ Coal price volatility against fixed-price tariffs affects margins (negatively and positively).
◼ Environmental legislation likely to require additional capex at the Chennai plant.
◼ Recent low solar tariff bid levels affect the returns available from new investment.

[dave4545] 14/10/2021 10:50

Bit better today online

12.23-12.58p

Was 12.28p offer earlier, might see a delayed buy later

[dave4545] 05/10/2021 13:47

Bad day on the markets everything drifting

Now 12.39p offer OPG online.

[tole] 04/10/2021 22:48

https://masterinvestor.co.uk/equities/opg-power-ventures-gradually-powering-back-its-recovery/OPG Power Ventures – gradually powering back its recoveryBy Mark Watson-Mitchell 04 October 2021 4 mins. to readOPG Power Ventures – gradually powering back its recoveryThe general reaction at the moment whenever one mentions investing in any business operating in India, is "don't touch it". People cite massive Covid-19 problems, rising prices and the rest – all factors to turn your attention away.India, which has a growing population, is progressing along the path to its target of 100% household electrification.However, it remains a power deficit country.Amongst the leading emerging economies of the world, currently India's per capita consumption is half that of Brazil, a quarter that of China, and under a fifth of that in Russia.The country is developing on several fronts – through its 'smart cities' programme; its 24×7 'Power for All' initiative industrial push; through its 'Make in India' infrastructure requirements; as well as the Government's push on electric mobility; and through the strong economic growth increasing urbanisation and its 'Housing for All' scheme.It is worth noting that the World Bank has projected India's economy to grow at 8.3% in 2022, while the IMF forecasts the growth next year at 9.5%.Whichever estimate you take, it still shows the opportunity for the Indian power sector is one of overall growth in the long term.Today's profile is about one company, which is engaged in a near vital sector, despite shutdowns and lower demand due to the pandemic, that still appeals to me as an interesting recovery play.What does it doThe AIM-quoted OPG Power Ventures (LON:OPG) owns, manages and develops power generation plants in India.The Isle of Man incorporated group, founded in 2008, considers that its mission is to build and maximise shareholder value through the provision of reliable, uninterrupted supply of power to the industrial sectors of India at competitive prices.Together with its subsidiaries, the Chennai-based group develops, owns, operates and maintains private sector power projects in India. It operates both thermal and solar power plants.Since its establishment the company has grown from 20 MW of generating capacity to 476 MW.The independent power producer has a 414MW coal-fired thermal power plant in Chennai. It also has a 31% interest in 62MW of solar assets in Kamataka, but this stake is due to be sold off in due course.The business objective of the group is to focus on the power generation business within India and thereby provide reliable, cost-effective power to the industrial consumers and other users under the 'open access' provisions mandated by the Government of India.To whom does it sell its powerIt primarily sells electric power to public sector undertakings and heavy industrial companies. OPG also sells into the 'short-term' market.The firm has a diverse base of over 200 industrial customers, operating on multi-year sales contracts. The group operates on robust tariffs with the majority of generation being sold directly to industries.It is one of the largest group captive players in India, whose consumers are from different sectors like paper, textile, chemical/petrochemical, automotive, foundry and steel.Latest resultsLast Friday saw the dealing volume in its shares multiply by some five times of its daily average, as 1.11m were traded against 217,529 as the average.That dealing activity reflected the results announcement the previous day, showing the year's revenues to the end of March down from £154m to just £93.8m, while its pre-tax profits were up significantly from £14.5m to £21.6m. Earnings per share for the 2021 year were 3.5p against 2.1p previously. There was no dividend.But impressively the group's net debt fell substantially from £53.4m to only £16.2m at the year end.Prospects going forwardRecent increases in the cost of thermal coal and freight prices are something of a stumbling block for the management, so the company has given no guidance for the current year.However, what we do know is the fact that India is now slowly, but surely, on its way to recovery from its second wave of Covid-19.In due course currently sluggish consumer spending will regain its previous momentum and power demand will pick up by leaps and bounds.Very tight equityThere are 400.76m shares in issue of which the Chairman Arvind Gupta and his interests own 206.43m, representing 51.51% of the OPG equity.M&G Investment Management holds 13.0%, while the British Steel Pension Scheme holds another 3.6% of the shares.Broker's ViewCenkos Securities, which is the broker to the company, despite the company's current hassles of higher coal and freight prices, together with the lack of profit guidance, maintains its 'buy' rating on the shares because it is trading at a material discount to its peers, while its long-term prospects remain robust.My ViewAlthough it currently has operational pressures, I reckon that this company has an important role in the Indian power supply sector.Way back in May 2014 the group's shares were trading at over 107p. Within the last year they have been as low as 9p and in late April this year they touched 22p.Now at 12.75p, they trade on a miniscule 3.65 times historic price earnings ratio.Of course, it may be hit massively for six in this current year due to higher prices, but I would bet that the company will pull itself up to meet its challenges.Capitalised at only £51m, this group's shares have to be well worth taking a 'recovery view' because it is such a necessary player in its marketplace.I now set a 16p Target Price over the coming year.

[dave4545] 04/10/2021 20:21

Business is India. AGM on the Isle of Man :-))

In normal times I think I would have attended and made a holiday out of it. Always wanted to visit that place.

[dave4545] 04/10/2021 13:51

Been some chunky buys today clearing out some sales as well.

Note as soon as that last 250k buy went in at 12.8p the mm let 240k go at 12.6p