Intraday View For 07/08/09

Nifty: Resistance 4620/4646/4680/4710/4733
Support 4550/4536/4505/4480/4444/4420

As we said yesterday : " Nifty is failing to sustain 4700 zone for past couple of sessions, so a short term correction is not ruled out. " & we witnessed a sell off from 4700 zone for almost 120+ Pts On Nifty. Today watch out for 4550, below it we Nifty has immediate strong support @ 4536. Sustaining below it, we may see 4480/4444 on Nifty.On upside 4620 is immediate resistance on Nifty.
Expect a flat/-ve opening on Nifty in line with Asian Mkt.

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NHPC IPO:
NHPC plans to raise between Rs. 5,032 cr to Rs. 6,039 cr. The issue will constitute
13.64% of the post-Issue paid up capital of the company. Of the total proceeds of the issue Rs. 1,677 cr to Rs. 2,013 cr would go to the GOI for their offer for sale.
The company intends to utilize the issue proceeds to part finance the
construction and development costs of projects, namely, Subansiri Lower
(2000MW), Uri-II (240MW), Chamera-III (231MW), Parbati-III (520MW), Nimoo Bazgo (45MW), Chutak (44MW), and Teesta Low Dam-IV (160MW). The rest of the proceeds are to be utilized for general corporate purposes.
It has current installed capacity is 3,615 MW and another 1,500 MW through its
subsidiary NHDC. NHPC has 4,622 MW of projects under construction, which are expected to be fully operational by FY13. It also has another 6,731 MW projects for which clearances from government are awaited. In addition, the company is carrying out survey and investigation works for projects aggregating 7,255 MW.
As a Mini-Ratna Category-I entity, NHPC will have greater autonomy to undertake new projects without GOI approval, subject to an investment ceiling of Rs. 500 cr set by the GOI.
The company enters into power selling agreements at very early stage of the project itself. In FY09 they derived 3436.22 cr i.e 84.81% of total income from sale of energy to SEB’s and successor entities. Payments are secure through LC pursuant to tripartite agreement between GOI, RBI and State. They have powers to regulate supply to defaulting state or recovering through GOI Central Plan assistance fund.

At upper price band of 36, the company is quoting at 32.4x of FY10 estimated earnings.It is though not CHEAP, but one may subscribe to it for listing gains.