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Manganese Ore India Limited (MOIL) largest producer of manganese ore and a 'Mini Ratna' PSU, is coming out with an IPO of 33,600,000 Equity Shares of Rs.10 each in the price band of 345-375. MOIL accounts for approximately 50.0% of India's total production of manganese ore and the company hopes to maintain its leadership position in the manganese ore market.

MOIL operates seven underground mines and three opencast mines to produce more then 1m tonnes of manganese ore. The company is well positioned to capture the growth potential of the Indian steel industry, due to its track record and strategic location of the mines. The key risk is that the Manganese ore and alloy industry has historically derived demand from the steel industry and hence is directly exposed to the volatility and the cyclicality of the global steel industry.

Details of the issue:

Issue Open: Nov 26, 2010 - Dec 01, 2010.
Issue Size: 33,600,000 Equity Shares of Rs. 10.
Face Value: Rs. 10 Per Equity Share.
Issue Price: Rs.340-375 Per Equity Share.
Listing at BSE and NSE.

The EPS for the year FY10 stands at Rs.28 and at the higher band of Rs.375 the company would be trading at 14 P/E, which is well priced. There is no direct comparable listed peer with which the stock can be compared with other than NMDC which trades at at 25 P/E.

With the expectations of robust growth in the domestic steel production, demand for manganese ore is likely to increase during the next few years. The domestic manganese ore demand to grow at a CAGR of about 9% during the next 2-3 years.

After the stupendous success of Coal India IPO, the MOIL IPO too, will evoke good response from institutional and retail investors. Hence, long term investors can apply for this issue and not for listing gains alone.

Despite President Barack Obama's recent election setbacks at home, his trip to India last week was met with a measured amount of success, according to both U.S. and Indian media. One of the biggest announcements that Obama made during his trip was his intention to support securing India a permanent seat in the U.N.'s Security Council. Although the chances of securing a seat are rather slim, Obama's endorsement is a big first step.

Most importantly, however, the U.S. president and Prime Minister set an agenda for improved trade between the two countries, signaling new opportunities for Indian and U.S. economic growth. Although many see the President's move to expand trade with India a politically risky one, considering how pervasive the misinformed notion of Indians taking jobs from Americans is, Obama addressed the issue straightforwardly.

A recent CNN article quoted Obama as saying:

"In 2010, trade between our countries is not just a one-way street of American jobs and companies moving to India. It is a dynamic, two-way relationship that is creating jobs, growth, and higher living standards in both our countries."

Obama unveiled a plan on Saturday November 6 to create over 50,000 jobs in the United States with $10 billion dollars in new contracts for the Indian government and private companies. Obama also urged India to loosen its trade and investment barriers in various different industries like retail and telecom, an appeal that went well with Indian officials.

After Obama's weekend visit, a New Delhi article published Tuesday November 9 reported that India asserted it was time to "seriously consider" making an agreement that would further open trade between the two countries. Although any new free trade agreements will likely take a long time to negotiate, Minister of Commerce and Industry Anand Sharma noted the importance of engaging "in negotiations for a comprehensive economic partnership agreement that encompasses trade, investment, and services."

The New Delhi article underscored the fact that while industry in India has long favored lowering barriers in trade and investment, for the first time the government is opening up to the idea. For both Indian and American investors, these talks could signal new global opportunities in a variety of industries.

By-line:
This guest post is contributed by Alvina Lopez, who writes on the topics of accredited online schools . She welcomes your comments at her email Id: alvina.lopez @gmail.com.

Power Grid Corporation of India,  India's biggest power transmission company is coming out with follow-on public offer of about 84 cr shares , which comprises a fresh issue of 42 cr shares and adding to that , an offer for sale of 42 cr shares by the President of India. The proceeds will be utilized for constructing country-wide high capacity power transmission corridors.

Details of the issue:
Issue Open: Nov 09, 2010 - Nov 12, 2010.
Face Value: Rs.10 Per Equity Share.
Issue Price: Rs.85- Rs.90.
Discount of 5% is available to retail investors.

The company's second quarter results were quite impressive. It announced a 41 percent increase in its net profit to Rs.651 crore and Rs.1,354 crore in first six months compared to the Rs.1,006 crore in 2009. The annualized EPS for the current year works out to Rs.6 and the FPO price of  85-90 makes the company available at 15 P/E, which is reasonably good. Currently the book value stands at Rs.40 and the offer is made at 2.25 times the book value.

Considering sound fundamentals, investors can subscribe to this issue with a medium to long term view. After the successful issue of Coal India, the Power Grid issue is also likely to be a hit.