ICICI Securities puts 'hold' on Tata Power
ICICI Securities has initiated coverage on Tata Power with a ‘hold’ rating while advising investors to consider aspects like loan servicing and project funding capabilities of the company.
By ET Bureau |
CMP: Rs 752.95
Target price: NA
ICICI Securities has initiated coverage on Tata Power with a ���hold��� rating while advising investors to consider aspects like loan servicing and project funding capabilities of the company. ���Falling coal prices do not augur well for Tata Power as it has a long position on coal. The company���s subsidiaries may face difficulty in servicing loan taken to acquire 30% stake in two Bumi mines, KPC & Arutmin,��� states the report.
The brokerage also feels that the slowdown in metals in China and the resultant sluggishness in power consumption, long-term coal prices will most likely be at $40-45 per thermal equivalent (TE). ���Thus, Tata Power will either refinance $950-million loan or raise additional loan in India to repay the Bumi debt, which appears difficult given the highly leveraged balance sheet,��� says the report. Moreover, Tata Power requires at least Rs 1,000 crore to fund its ongoing projects, notes the report.
Target price: NA
ICICI Securities has initiated coverage on Tata Power with a ���hold��� rating while advising investors to consider aspects like loan servicing and project funding capabilities of the company. ���Falling coal prices do not augur well for Tata Power as it has a long position on coal. The company���s subsidiaries may face difficulty in servicing loan taken to acquire 30% stake in two Bumi mines, KPC & Arutmin,��� states the report.
The brokerage also feels that the slowdown in metals in China and the resultant sluggishness in power consumption, long-term coal prices will most likely be at $40-45 per thermal equivalent (TE). ���Thus, Tata Power will either refinance $950-million loan or raise additional loan in India to repay the Bumi debt, which appears difficult given the highly leveraged balance sheet,��� says the report. Moreover, Tata Power requires at least Rs 1,000 crore to fund its ongoing projects, notes the report.
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