Background
Cals Refineries Limited was incorporated on the 25th of July, 1984 as a private limited company. On 22nd September, 1992 the company was converted into a public limited company and is now listed on the Bombay Stock Exchange (BSE) under the Scrip Code 526652.
With the energy sector playing a pivotal role in global economies, the company aims to actively participate in it's growth in India as well as in international markets.
Cals Refineries Limited, in the first phase of a mega project, is establishing a 4.8 MMTPA (100,000 BPD) refinery at Haldia, India.
Comparison with existing refineries in India
* Reliance Industries (33 million tonne)
* Essar Oil (7.5 million tonne)
* Reliance Petroleum setting up 29 million tonne
* MRPL (10.5 million tonnes)
* Chennai Petroleum (9.5 million tonnes)
* Bongaigaon Refinery (2 million tonnes)
Management of CALS Refineries
Chairman of Cals Refineries, Mr. M.S. Ramachandran, was Chairman of Indian Oil Corporation (I.O.C.), India’s largest Oil & Gas company. Mr. M. S. Ramachandran has over 38 years of experience in the Oil and Gas industry. He was Chairman of Indian Oil Corporation (I.O.C.), India’s largest Oil & Gas company. He helped the government to implement various policies that would attract private players into the Oil & Gas sector.
At I.O.C., he redirected the organization around key business lines with greatercommercial focus and market facing capabilities. During his tenure, Mr. Ramachandran increased sales growth from USD 25 Billion to USD 34 Billion, which increased the net profit of company from USD 0.65 Billion to USD 1.2 Billion, raising the company’s Fortune ranking from 223 to 189.
Crude Oil supply
Cals Refineries Ltd has signed a deal with oil major BP for up to 5 million tonnes of crude a year for a refinery. So the supply of crude is already guarenteed.
Upstream Integration
Spice Energy, the parent company of CALS has another subsidiary, Spice Exploration, which has operations in Africa and Indonesia from where crude could be made available.
Signed with customers for finished products
Cals Refineries has signed a deal with oil major BP to buy up to 100,000 bpd crude for its refinery. As per the deal, 60,000 bpd is confirmed, the balance of 40,000 is optional.
Additionally, Cals Refineries Ltd has signed a memorandum of understanding (MoU) with Bharat Petroleum Corporation (BPCL) for petro products off-take from CALS. The MoU has been signed in order to off-take the part of petroleum products by BPCL from CALS in its first phase which is a 100,000 BPSD crude oil refinery after accounting for the products committed to British Petroleum (BP) and the entire petro products from CALS in the second phase of expansion which is another 100,000 BPSD refinery at Haldia, West Bengal.
Some calculations and stock price estimation
CAPACITY OF REFINERY = 4.8 MMTPA (Million Metric Tonnes Per Annum)= 100000 Barrels Per Day (Approximately) = 36500000 Barrels Per Annum
Gross Refining Margin (GRM) Per Barrel is 10$ = 500Rs Approx.
Approx. Annual Profit = 36500000 * 500 RS = 1825 Crores
EPS at above nis. = 1824/794 = 2.3 **794 crores is total Equity of CALS Refineries
Average P/E ratio of Indian Refining Sector would 15
Share Price = 15 *2.3 = 34.50 Rs.
So if everything goes as per calculation in phase 1 and company manages to produce as estimated, around Rs. 30 - 40 could be the stock price range.
They have plans of capacity expansion for second and third phase as well. I am not sure about the numbers.
CMP of the stock: 0.25-0.30 Rs.
Downside Support @ 0.10-0.15 paise.
If you are investing in stock markets and not in Bank FD's/bonds/Kisan Vikas Patra, you have the appetite to take risks in your investments. ;)
So you decide how much money you can loose comfortably by investing in penny stockand invest that amount in CALS Refineries. !@##@$%^%&^%$#@ this must have been your immediate reaction after reading this statement but this is what my true opinion is!
A negative note to make
Cals refineries promoters hold only 0.11 percent share in this company and Shares held by Custodians and against which Depository Receipts have been issued 83.98 percent (custodian name is The Bank of Newyork Mellon DR) so public share holding is 99.89 percent and there are a huge equity capital of cals refineries.
Total 7,931,300,000 shares of Cals refineries held by general public.
As I have read in Business Standard news article, promoters do hold a big chunk of equity (almost >70%) which is held by custodians for issue of depository receipts at the moment.
I am not recommending you to buy stocks to invest in CALS refineries but I am asking you to take a bet in this counter. If it goes well, you would gain a lot, if you loose, never mind.
Few of the penny stocks that made such magic are:
ABAN OFFSHORE - 6.00 Rs to 5393 Rs
KS OILS - 0.50 paise to 142 Rs
MERCATOR LINES - 0.40 paise to 184 Rs.
COUNTRY CLUB- 0.42 paise to 222 Rs
PANTALOONS RETAIL- 2.23 Rs to 875
JAI CORPORATION- 16 Rs to 1079 Rs
Update:-
CALS REFINERIES, which is topping Volumes in Bombay Stock Exchange, is one of the most talked in penny stock segment. I have seen in many forums and even brokers are recommending their client as a Multibagger stock just based on the humongous plans made by the company. It’s from unlisted Spice Energy group, which has its presence in Exploration, Mining and Refining sectors. Promoters acquired listed NBFC and planned to set up crude refinery. Equity floated to 794 Cr through GDR issue. Before giving any opinion on this stock lets first dig up into details of plans made by the company.
Cals Refineries plans to Implement a 20000 Cr, 4.8MMTPA refinery project at Haldia (East coast, West Bengal) by June 2011 in Phase I for which it will be shipping existing plants from Germany/Canada/US to India and adding more secondary processing units. Cals will be implementing another 4.8 MMTPA (100,000 BPD) by July 2012 taking the total capacity to 9.6 MMTPA (200,000 BPD) by July 2012.Lower capital cost/bbl and faster implementation than Greenfield project is management’s reasoning for a second-hand refinery. Company has also planned for phase III as of now I wont go deep into it. The refinery project would involve moving basic crude distillation units (CDU) from a Petro Canada plant and a refinery in Kansas, USA, moving secondary processing units from Bayernoil Ingolstadt refinery (Germany) and adding new Propylene and Benzene units .The refinery being brought from Germany is under operations from late 60's and units from PetroCanada and Kansas (US) are under operations from 70’s, these refinery will be dismantle and than transported through ship and assembled at Haldia. The refinery will be relocated by Ventech Corp USA, which has done similar relocation projects, Looking at the Management of Cals having vast experience & expertise, Chairman of Cals Refineries, Mr. M.S. Ramachandran, was Chairman of Indian Oil Corporation (I.O.C.) having over 38 years of experience in the Oil and Gas industry. Ramesh Bhosale is Chief Financial Officer, Independent Non-Executive Director of Cals Refineries Ltd. He has over 25 years of experience in the field of Costing, Finance, Accounts, MIS, Merger & Acquisition and Project Finance. Cals has some more achivement on its name like Crude oil supply contract with BP (World’s Second petroleum Company) & Sign MOU for 1000 acres land, already allotted 400 acres.
Now let look at the other side of it, there are some important facts that should be stressed on before making any position in this stock.
Due to economic meltdown, company has not able to achieve financial closure (FC) till now. Hence for the project to be completed on time look doubtful to me.
Shareholding pattern of Cals: - Interestingly, data available with BSE shows that Spice is the only promoter of CALS, controlling 0.11 per cent stake through a group outfit called SRM Exploration. But from the last two years the promoters of Spice Mr Sanjiv Malhotra, Mr Ravi Chilukuri (CEO) and Mr Gagan Rastogi and their families are claming to actually controlled as much as 75 per cent of the paid-up equity capital in Cals through GDR, but interestingly to note the shareholding pattern for the quarter ending Dec 2009 where GDR holding is reduced to only 61.16% from 83.98% in June 2009 quarter, whereas the total public share holding also increase from 15.91% to 38.73%. Number of shareholders also increased from 71,247 to 123,496 from june 2009 till now. However seeing the positive side is that Fund houses has made an entry.
India Max Investment Fund Ltd: 2.40%
Merrill Lynch Capital Markets Espana S.A. S.V.(spain): 1.27%.
GDR holdings are continuously reducing from the june 2009 qtr this creates a doubt.
Whereas looking at the work related activities at haldia only land filling is in progress and dismantling of refinery has not yet been started, Company is waiting for the Financial Closure and onces it is done than they will start the further process.
The thinning refining margin may pose further problems for the project, which suffers from an estimated cost disadvantage of $2 a barrel on crude oil transportation from the proposed port at Dhamra in Orissa to Haldia in West Bengal.
Cals is having a Market cap around 450 crore & fundamentals are nil as on date.
Whereas the revised circuit of 10% in Cals makes it a trader paradise.
Seeing all the aspect of the company as of now Cals is a very risky affair. But saying goes higher the risk; higher the return. So one can take risk within their comfortable zone.
If you are investing in stock markets and not in Bank FD's/bonds/Kisan Vikas Patra, you have the appetite to take risks in your investments. ;)
So you decide how much money you can loose comfortably by investing in penny stockand invest that amount in CALS Refineries. !@##@$%^%&^%$#@ this must have been your immediate reaction after reading this statement but this is what my true opinion is!
A negative note to make
Cals refineries promoters hold only 0.11 percent share in this company and Shares held by Custodians and against which Depository Receipts have been issued 83.98 percent (custodian name is The Bank of Newyork Mellon DR) so public share holding is 99.89 percent and there are a huge equity capital of cals refineries.
Total 7,931,300,000 shares of Cals refineries held by general public.
As I have read in Business Standard news article, promoters do hold a big chunk of equity (almost >70%) which is held by custodians for issue of depository receipts at the moment.
I am not recommending you to buy stocks to invest in CALS refineries but I am asking you to take a bet in this counter. If it goes well, you would gain a lot, if you loose, never mind.
Few of the penny stocks that made such magic are:
ABAN OFFSHORE - 6.00 Rs to 5393 Rs
KS OILS - 0.50 paise to 142 Rs
MERCATOR LINES - 0.40 paise to 184 Rs.
COUNTRY CLUB- 0.42 paise to 222 Rs
PANTALOONS RETAIL- 2.23 Rs to 875
JAI CORPORATION- 16 Rs to 1079 Rs
Update:-
CALS REFINERIES, which is topping Volumes in Bombay Stock Exchange, is one of the most talked in penny stock segment. I have seen in many forums and even brokers are recommending their client as a Multibagger stock just based on the humongous plans made by the company. It’s from unlisted Spice Energy group, which has its presence in Exploration, Mining and Refining sectors. Promoters acquired listed NBFC and planned to set up crude refinery. Equity floated to 794 Cr through GDR issue. Before giving any opinion on this stock lets first dig up into details of plans made by the company.
Cals Refineries plans to Implement a 20000 Cr, 4.8MMTPA refinery project at Haldia (East coast, West Bengal) by June 2011 in Phase I for which it will be shipping existing plants from Germany/Canada/US to India and adding more secondary processing units. Cals will be implementing another 4.8 MMTPA (100,000 BPD) by July 2012 taking the total capacity to 9.6 MMTPA (200,000 BPD) by July 2012.Lower capital cost/bbl and faster implementation than Greenfield project is management’s reasoning for a second-hand refinery. Company has also planned for phase III as of now I wont go deep into it. The refinery project would involve moving basic crude distillation units (CDU) from a Petro Canada plant and a refinery in Kansas, USA, moving secondary processing units from Bayernoil Ingolstadt refinery (Germany) and adding new Propylene and Benzene units .The refinery being brought from Germany is under operations from late 60's and units from PetroCanada and Kansas (US) are under operations from 70’s, these refinery will be dismantle and than transported through ship and assembled at Haldia. The refinery will be relocated by Ventech Corp USA, which has done similar relocation projects, Looking at the Management of Cals having vast experience & expertise, Chairman of Cals Refineries, Mr. M.S. Ramachandran, was Chairman of Indian Oil Corporation (I.O.C.) having over 38 years of experience in the Oil and Gas industry. Ramesh Bhosale is Chief Financial Officer, Independent Non-Executive Director of Cals Refineries Ltd. He has over 25 years of experience in the field of Costing, Finance, Accounts, MIS, Merger & Acquisition and Project Finance. Cals has some more achivement on its name like Crude oil supply contract with BP (World’s Second petroleum Company) & Sign MOU for 1000 acres land, already allotted 400 acres.
Now let look at the other side of it, there are some important facts that should be stressed on before making any position in this stock.
Due to economic meltdown, company has not able to achieve financial closure (FC) till now. Hence for the project to be completed on time look doubtful to me.
Shareholding pattern of Cals: - Interestingly, data available with BSE shows that Spice is the only promoter of CALS, controlling 0.11 per cent stake through a group outfit called SRM Exploration. But from the last two years the promoters of Spice Mr Sanjiv Malhotra, Mr Ravi Chilukuri (CEO) and Mr Gagan Rastogi and their families are claming to actually controlled as much as 75 per cent of the paid-up equity capital in Cals through GDR, but interestingly to note the shareholding pattern for the quarter ending Dec 2009 where GDR holding is reduced to only 61.16% from 83.98% in June 2009 quarter, whereas the total public share holding also increase from 15.91% to 38.73%. Number of shareholders also increased from 71,247 to 123,496 from june 2009 till now. However seeing the positive side is that Fund houses has made an entry.
India Max Investment Fund Ltd: 2.40%
Merrill Lynch Capital Markets Espana S.A. S.V.(spain): 1.27%.
GDR holdings are continuously reducing from the june 2009 qtr this creates a doubt.
Whereas looking at the work related activities at haldia only land filling is in progress and dismantling of refinery has not yet been started, Company is waiting for the Financial Closure and onces it is done than they will start the further process.
The thinning refining margin may pose further problems for the project, which suffers from an estimated cost disadvantage of $2 a barrel on crude oil transportation from the proposed port at Dhamra in Orissa to Haldia in West Bengal.
Cals is having a Market cap around 450 crore & fundamentals are nil as on date.
Whereas the revised circuit of 10% in Cals makes it a trader paradise.
Seeing all the aspect of the company as of now Cals is a very risky affair. But saying goes higher the risk; higher the return. So one can take risk within their comfortable zone.
STRONG REASONS TO BUY
ReplyDelete1. Setup projects for Rs. 20000 crores. After completing this it will become india’s second largest refinery.
2.Current price is around Paisa 30. Same with RPL when it haven’t started it’s refinery price was around Rs.200.
3.Public confused by share holding, story is , 96 % share are converted to GDR & hold by Bank of New York.
4.Among of them 75 % hold by Spice Group in form of GDR.
5.Crude oil supply contract with BP (World’s Second petroleum Company) for ten Years.
6.Sign MOU for 1000 acres land , Already allotted 400 acres.
7.Currently trading below its face value Rs. 1.
Cals Refineries Ltd has informed BSE that Al Qebla Al Watya of Kuwait on November 25, 2010 has signed agreements with the Company as its first entry into the Indian oil refining Sector. The agreements cover cash investments of USD 150 million through GDR route. The investment is subject to all Indian government and regulatory approvals.
ReplyDeleteAl Qebla Al Watya is an investment vehicle of Kharafi. The Kharafi family with a heritage of over 100 years hails from Kuwait and controls one of the Middle East's largest conglomerates in the field of finance, construction, manufacturing (including oil and gas equipment), food industry, telecommunication and hospitality among many others. The Kharafi Group now operates in more than 30 countries around the world and has more than 100,000 employees.
Cals Refineries Ltd has informed BSE that the Company entered into an Agreement with Lohrmann International GmbH (in short Lohrmann) for supply of oil refinery located in Germany. The Company was constrained to file a case and the Hon'ble Delhi High Court has been pleased to restrain Lohrmann from creating third party interest in the said oil refinery. The disputes between the parties will be settled in arbitration by the Arbitral Tribunal under the aegis of Indian Council of Arbitration, the invocation whereof is already under process.
ReplyDeleteThe latest development in counter of Cals Refineries: It has got a big investor, Kuwait’s Kharafi Group as investor through company GDR issue. Kharafi Group operates in more than 30 countries and has more than 100,000 employees.
ReplyDeleteAl Qebla Al Watya, the Kharafi investment vehicle, will invest in with $150 million (Rs. 675 Crores) through global depository receipts (GDR) for Cals Refineries for building the refinery at Haldia.
This refinery project has been delayed by almost 3 years now and company management is facing problems in financial closure of the project. With this positive development, it is expected that management would be able to achieve financial closure soon and progress on the project.
Cals refineries stock was locked in upper circuit of 18.5% today with orders pending to buy shares at huge quantity (6.5 crores).
Cals is in physical possession of 400 acres at Haldia. It has bought a refinery from Bayernoil, Germany.
The old refinery is being dismantled at Ingolstadt along the river Danube and shipped to Haldia.
The project is running almost three years behind schedule. Promoters of the company, Spice Energy Group, could not arrange the funds in time.
The Kharafi investment, subject to the approval of the Indian government, is likely to iron out the glitches.
Manabendra Guha Roy, CEO of Cals, said the refinery, capable of producing Euro-IV compliant fuel, would start commissioning by 2012. “The shipment from Germany should start coming in the next six months.”
The project cost is estimated to be $1.1 billion, or Rs 5,000 crore. It will become Bengal’s second oil refinery after Indian Oil Corporation’s facility in Haldia.
Global energy major BP Plc may supply oil to the refinery, which needs 2.5 million tonnes of heavy (high sulphur) crude and a similar supply of light (low sulphur) crude.
I have discussed Cals Refineries few times & have recommended it as penny stock bet. I have investment in it.
Booked 50% profit @60 paise. Investments are free of cost now.
ReplyDeleteOne can also visit this blog.Nice update on Cals Refinery.
ReplyDeletehttp://stockask.blogspot.com/2010/12/cals-refineries-what-future-holds.html
Cals Refineries, which is setting up a refinery in Bengal, plans to induct Hardt Group affiliates as a strategic investor with management control to overcome its resource crunch.
ReplyDeleteOfficials said Cals Refineries had entered into agreements to purchase two refineries — Cenco Refining Company (the US) and Atas Refinery (Turkey) — owned by the affiliates of Hardt Group on a refurbished basis for the second phase of Haldia project.
Atas is owned by international oil majors BP, Shell, & Turcas, while Cenco is majority owned by American multi-millionaire Pat Robertson’s trust. While Cenco is a 50,000-bpd (barrel per day) refinery, Atas’s capacity is around 100,000 bpd.
Analysts said, “Hardt has a track-record in financing and arranging international refinery relocation projects, which is Cals’ main strategy. The interesting aspect is that the sellers of these refineries — which are some associates of Hardt — have agreed to be equity partners in the project, in return for the refineries. We may have to wait for more clarity to take a view on the project.”
Cals plans to come out with global depository receipts for over 7 million, which will be purchased by the global investment firm. Cals will pay Hardt 7 million, with 7 million paid in the form of global depository receipts and the balance in cash.
Sources said it would soon apply to the government for regulatory approvals and later to the Foreign Investment Promotion Board for coming out with the GDR issue.
Hardt will ensure that the equipment get refurbished before they are delivered to the company and shipped to Haldia for the phase II of the project. The equipment will increase the aggregate refining capacity of Cals’ planned refinery project in Haldia to 200,000bpd.
In 2008, Cals had entered into an agreement to buy Bayernoil’s Ingolstadt refinery through Lohrmann International, which when dismantled, shipped, and re-erected in Haldia, would form the Phase-I of the project.