The Reliance Dhirubhai Ambani Group (ADAG) is evaluating options to venture into the power equipment business.
“We are talking to four, five global companies for a strategic partnership, but we are yet to decide on whether to buy or make core critical equipment for our plants,” Chairman Anil Ambani said at a news conference today.
“If we decide, neither Reliance Energy nor Reliance Power will be involved in that,” he said.
The media meet was called to announce Reliance Power Ltd’s initial public offer from January 15 to 18 in a price band of Rs 405-450 a share.
The share sale, aimed at mobilizing up to Rs 11, 500 crore, would be the country’s biggest mop-up through an IPO. Ambani said the company expects its shares to be listed on the bourses by the first week of February.
The ADAG chairman said group company Reliance Natural Resources Ltd is scouting for alliances to source coal from outside India, to secure long-term fuel supply for its coal-based power plants.
“Many countries like China, Indonesia, Philippines and Australia have good coal reserves and we are talking to them. They have shown interest to supply coal on a long-term basis,” Ambani said.
Besides, the company also proposes to bid for licenses for oil and gas exploration in the forthcoming rounds of bidding.
Reliance Power, which has 28,200 mw of generation capacity in the pipeline, is building coal-based power plants at Sasan (4000 mw) and Krishnapatanam (4000 mw), but has no plants in operation yet.
Ambani said Reliance Power was also open to inorganic opportunities. “We are looking to acquire a 2500 mw operating asset in Singapore.”
Reliance Power will float special purpose vehicles to develop the capacity in the pipeline. He said the company would not limit itself to coal and gas fired plants, but it would also invest in wind power and nuclear power.
The proceeds of the Reliance Power IPO will be utilised to fund projects like Rosa Phase I & II (600 mw each) in Uttar Pradesh, Sasan (3960 mw) in Madhya Pradesh, Butibori (300 mw) and Shahapur (1200 mw) in Maharashtra and Urthing Sobla (400 mw) in Uttarakhand.
It will be the first public offering in which retail investors, who constitute about 30 per cent, will get a discount of about Rs 20 a share.
Further, in a staggered payment facility, retail investors would be required to pay only 25 per cent of the total investment amount at the time of submitting the application and the rest on allotment. Recently, the follow-on public issue by ICICI Bank had also granted this option to retail investors.
“Reliance Power IPO will be not only the largest IPO so far, but also the first to offer a discount for retail investors,” he said.
The issue will constitute 11.5 per cent of the post issue paid-up capital of the company.
Understanding Short Term Trading
Before I begin, this blog is not for intraday traders. My definition of short term implies duration of around 2 to 3 months.
Short Term stock picking is no rocket science, but rather a visual interpretation of technical charts. A basic moving average on a time frame chart will show the direction of the securities movement.
Moving averages is a mathematical results calculated by averaging a number of past data points. Moving averages (MA) in it's basic form is calculated by taking the arithmetic mean of a given set of values on a rolling window of timeframe. Once the value of MA has been calculated, they are plotted onto a chart and then connected to create a moving average line. Typical moving averages used for short term trading are 50 MA and 100 MA.
Types of Moving Averages
1) Simple Moving Average (SMA)
SMA is calculated by taking the arithmetic mean of a given set of values on a rolling window of timeframe. The usefulness of the SMA is limited because each point in the data series is weighted the same, regardless of where it occurs in the sequence. Critics argue that the most recent data is more significant than the older data and should have a greater influence on the final result.
2) Exponential Moving Average (EMA)
EMA overcomes the limits of SMA, where more weight is given to the recent prices in an attempt to make it more responsive to new information. When calculating the first point of the EMA, we may notice that there is no value available to use as the previous EMA. This small problem can be solved by starting the calculation with a simple moving average and continuing on with calculating the EMA.
The primary functions of a moving average is to identify trends and reversals, measure the strength of an asset's momentum and determine potential areas where an asset will find support or resistance. Moving averages are lagging indicator, which means they do not predict new trend, but confirm trends once they have been established.
A stock is deemed to be in an uptrend when the price is above a moving average and the average is sloping upward. Conversely, a trader will use a price below a downward sloping average to confirm a downtrend. Many traders will only consider holding a long position in an asset when the price is trading above a moving average.
In general, short-term momentum can be gauged by looking at moving averages that focus on time periods of 50 days or less. Looking at moving averages that are created with a period of 50 to 100 days is generally regarded as a good measure of medium-term momentum. Finally, any moving average that uses 100 days or more in the calculation can be used as a measure of long-term momentum.
Support, resistence and stoploss can be infered by referring the closet MA below or above the market price. The other factor that is used in short term momentum is the trading volume. The moving averages along with the trading volume can provide a better insight to short term movement.
Markets are moved by their largest participants - I believe this is the single most important principle in short-term trading. Accordingly, I track the presence of large traders by determining how much volume is in the market and how that compares to average. Because volume correlates very highly with volatility, the market's relative volume helps you determine the amount of movement likely at any given time frame--and it helps you handicap the odds of trending vs. remaining slow and range bound.
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