Sir, you seem to be expertise and related to the industry. It seem that open cast mining is less costly not sure of whether efficient way to mine most of the coal reserves and that too faster than other methods.
I did not understand or find any information related to your quote that Prakash was wise in bidding at 1100. It is due to the GCV value of Bhaskarpara is much higher than Bikram or Gare Palma?
I am not an expert at all, just like to keep gaining knowledge 
Just making a guess here, which to me seems to follow good logic. Prakash could have got much cheaper blocks simply by proportionately excessive bidding. But it chose a block which seems to have a history of high price. Seeing the mine docs, it seems to be a decent quality deal (location+GCV+mining cost).
Anyone tracking Prakash Pipes?
It is still not very crystal clear in my mind why 1100 is a best price paid. I found GCV which was unknown to me but the Bhaskarpara mine GCV is not available, the location advantage is still understood but no the mining cost.
Prakash has coal linkage from Coal India Limited to meet the existing and increased requirements. I know these coal mines will help profitability but current with the unknowns like GCV, location advantage(mathematical calculations which tell us how it is cheaper) and the mining cost advantage, it is difficult to gauge the profits it will reap in future. The iron ore mines took 2.5 - 3 years to get all the necessary permission to mine. Unless I could get these numbers I will not be able to build confidence on this coal mine aspect. That said I will be trying to get it as we discussion more on it.
Currently, Prakash BS looks good with low debt but with new mines expenses I fear BS will be loaded with more debt and the advantage to to be reaped in next cycle could be dented. If the decision to bid for coal mind happens to be bad (in future) then next cycle benefits could be flushed out with it… that is my fear.
Coal India is very expensive, quality is not great either, hence the greatest consumers, UMPP of Adani and Tata were built with Indonesian coal in plans and then turned to Australian coal.
CIL cannot even supply demands, blaming very often, coal hauling capacity of Indian Railway as the bottle neck.
Hence I think private players prefer captive mines which have longer leases and pay-as-you-use contracts.
If at all this is not a good contract then Prakash can always re-think and back out like the previous bidder.
My guess is grade A-C coal might even be the rare coking coal, worth more than the usual Indian varieties.
Any advantage at this counter of recently declared steel scrap policy…? Do it also manufacture GPI (granualised pigment iron)? Heavy sell off on friday…
Yes, they should get some positive impact since they do recycling, in addition to being primary steel producers. Yes, they do trade in intermediate steel forms such as pig iron. The sell-off is because of the bad results, which were kind of expected given the condition of the steel industry but some big players avoided really bad numbers by some accounting tricks.
As per this article the beneficiaries are also permitted to make Commercial sale of upto 25%.
In my opinion Prakash Industries is a seasoned player in operating Coal Mines as it has successfully operated earlier allotted Chotia Mines in Chattisgarh. Prakash Industries is regional strong player in Chhattisgarh and would have defenitely collected all the minute details pertaining to mines before bidding.
Any idea why the net cash flow is negative over the last 10 years?
They have started pledging more and more shares recently…
Any opinion about it?
Exited after holding for 2 years. Lost patience, I do not see steel margins recovering for 2 years. The general slowdown and over-production will take that long to sort themselves out. Do not see space for small players in an industry of giants. There are plenty of good all-weather stocks which are beaten down in current market.
Even Tata is not spending on capacity, only on efficiency. Prakash is eroding value by still not being conservative.
Plenty of coal coming up for everybody and anybody. Standard upfront payment policy has been 10% will now be reduced to 0.5% of total reserve size.
https://steelguru.com/coal/india-may-reduce-upfront-payment-in-coal-block-auction/552719
Clarification sought regarding resignation of the independent director
I was averaging and was lucky around the low 40 mark but my patience gave up. There are many other sectors and many other businesses to get better gains in the same time frame for any recovery here.
Some sectors may never see a revival.
Fitch predicts a multi year low, reason is simple, its China.
Check the “5 year” chart, there is an uptrend recently but it will not last.
Click on “Forecast” and the same prediction emerges.
Auto Scrap policy is stuck, it may never pass, maybe it does not make sense for India.
Exited almost all in steel (producers) only kept GPIL because they export raw-material to China. It jumped almost 20% last week.
There is some recovery in steel prices in the last 3 months and as per discussions with persons in Steel industry the prices are expected to increase in January also. However the increased demand is appearing to be on account of inventory buildup and actual demand is not that visible in the market.
But being an optimist I believe that India is a Infrastructure starved nation and once the infrastructure development cycle starts there will be no dearth of demand.
Prakash industries is gradually increasing its Capacity and with the commissioning of Iron ore mines and allocation of new Coal Blocks, the company is in a better position to take part in the long term infrastructure journey of the Country.
Debt level is very much satisfactory and managable :
As on 30/09/2019
Long term Debt: 387
Short term Debt: 120 Cr
Gross Total Debt : 507 Cr
Total Cash: 59.63+22.46+31.64= Rs 113.73 Cr
Net Debt = 393.27 Cr
The fixed asset of the company is Rs 3079 Cr(Prop,Plant& Machinery Rs 2329 Cr and CWIP 750 Cr) against Long term Debt of Rs 387 Cr.
The Core Current Asset of the Company is Rs 391 Cr(Inventory+ Recievables) against short term debt of Rs 150 Cr.
Current Ratio which measure the liquidity of the Company is comfortable at 1.58.
The above clearly shows that the long term as well as short term Assets are funded mostly by internal accruals and not by debt.
The company is making lot of Capex. High CWIP and write off of Assets is a point of worry in this Company.
Claims Recoverable (refer note.40 ) Rs 45.69 Cr
(The amount has increased from Rs 27.61 Cr as on 31/03/2018 to Rs 45.68 Cr as on 31/03/19)
Note 40 : Pursuant to the cancellation of the Chotia coal mine of the Company vide Hon’ble Supreme Courts O rder, the assets pertaining to this mine have been vested with the new owner in terms of a government order. The book values of the assets transferred to the new owner have been
ggregated and shown as claim recoverable in the Books of Account.
Necessary adjustment for gain/loss will be made in the Books of ccounts on the final settlement of the compensation claimed by the Company.
The claim has increased. Can any body throw some light on this.
I believe Prakash is yet not beneficiary of the new lower tax rate regime yet. As it has MAT credit to consume. Is my understanding correct?
Yes, the Company is having un utilised MAT credit of around Rs 225 Cr
