Wednesday, March 7, 2012

'SMART Wireless Limited' does it again - Wins bid for Ujjain Distribution Franchisee

After winning Madhya Pradesh's Gwalior Power Distribution Franchisee bid, 'SMART Wireless Limited' has now won the bid for Ujjain city, making it two in a row winner in Madhya Pradesh DF landscape (see our earlier blog 'Gwalior Distribution Franchisee Bid Results - 'SMART Wireless Limited (Essel Group)' emerged as a Winner' for Gwalior bid analytics). The company's winning quote of Levelized Input Rate (LIP) was Rs. 3.781/unit, letting it again overtake other companies in the financial bid. Overall, there were 10 companies, who participated in Ujjain DF bids, out of which 9 were Technically qualified (see list of all technically qualified bidders for Ujjain Distribution Franchisee).

Some brief observations from the price bid are:
  • Minimum LIP was Rs. 2.390/unit among all quoted LIPs.
  • Margin rate between winning and 2nd price bid was Rs. 0.223, approximately 6% lower than the winning bid. The 2nd ranker in the bid is GTL, an existing DF operator at Aurangabad. Note that GTL won Auranganbad DF bid at higher bid LIP of Rs. 3.74/unit.
  • 3rd and 4th bids were respectively 12% and 18% lower than winning bids.
  • 4 out of 9 companies has given the price bid in the range of 2.95 - 3.35 Rs./unit. Two bidded higher  and 3 bidded lower than this range.
  • The bid is aggressive as other established power players are lower by around 20%-25% than winning bid.
About Smart Wireless Ltd. 
The Smart Wireless Ltd. company is into generate new technologies in the messaging space and facilitate technology and process driven companies using cost effective data transfer solutions such as SMS. The Wire segment of the Essel group is currently one of the largest cable distribution system in India, with presence in 54 cities. It will be interesting to see their existing B2C reach also to the power distribution business. Overall the Essel group has wide portfolio in Infrastructure (roads, SEZ, power plants etc.), Media (ZEE, DNA being their leading brands), Technology, Education, and other diversified businesses.

Upcoming Results
Sagar city results are likely to be announced in next week on 12th March. With 'SMART Wireless' as the winner of 2 cities already, it is to be seen if they would do a hat-trick. It is also a question for MP policy makers if they would allow one company to do all the 3 DFs at such aggressive rates and risk non-performance.

Posted by: Kunjan Bagdia @ pManifold

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