Good Steps to successful Life: MOIL IPO analysis

Registered Office Address MOIL Bhavan, 1-A, Katol Road, Nagpur – 440013, Maharashtra, India

Phone 91-712-2806100/216 Fax 91-712-2591661

Email ipo@moil.nic.in Website http://www.moil.nic.in

Issue Open 26-Nov-2010 Issue Close 01-Dec-2010

Issue Size 3,36,00,000 Equity Shares

Issue Type Book Building

Face Value Rs.10/-

Price Range Rs.340/- to Rs.375/-

Tick Size Re.1/-

Market Lot- 17 Minimum Order Qty- 17

Listing Stock Exchange NSE, Mumbai

Registrar To The Issue Karvy Computershare Private Ltd.

Grading 5

Book Running Lead Managers Edelweiss Capital Ltd., IDBI Capital Market Services Ltd., J.P. Morgan India Private Ltd.

Analysis

Company Background

MOIL Ltd. was incorporated in 1962 as Manganese Ore (India) Ltd., following an agreement between the GoI and CPMO (Central Provinces Manganese Ore Company Ltd.) wherein GoI held 51% stake while CPMO held 49% stake. In 1977, CPMO sold its stake to GoI and MOIL became 100% GoI undertaking. In 2008, MOIL was granted “Mini Ratna” status. In 2010, the name of the company was changed to MOIL Ltd.
MOIL was the largest producer of manganese ore by volume in India in Fiscal 2008 and accounted for approximately 50.0% of India's total production of manganese ore in Fiscal 2008.
MOIL currently operates seven underground mines and three opencast mines in India.
As on October 1, 2010, MOIL has access to 21.7 million tonnes of proved and probable reserves and a total of 69.5 million tonnes of measured, indicated and inferred mineral resources of manganese ore. 55.0% of company’s proved and probable manganese ore reserves have average manganese content of 40.0% or higher.
Company sells manganese ore in Indian markets, primarily to ferro-alloy producers in steel industry. SAIL’s subsidiaries and division Maharashtra Elektrosmelt Ltd. and Bhilai Steel Plant accounted for 22.1% of company’s manganese ore sales revenue in FY 2010. Top ten customers accounted for approximately 51.5% of MOIL sales of manganese ore in FY 2010.
MOIL operates two wind farms with an aggregate capacity of 20MW.
Post issue promoters & promoter’s group shareholding will reduce to 80% from existing 100%.

Objects of the issue

The purpose of the offer is to carry out the divestment of 33,600,000 Equity Shares by the GoI. The company will not receive any proceeds from the Offer and all proceeds shall go to the selling shareholder.

IPO Grading / Rating

CARE has assigned an IPO Grade 5 to MOIL’s IPO indicating Strong fundamentals. CARE assigns IPO grading on a scale of 5 to 1, with Grade 5 indicating strong fundamentals.

Projected Financial statements

· Income Statement

Good Steps to successful Life