Monnet Ispat Ltd...cmp Rs. 358.....a bluechip in making....

Friends ,
I have been tracking Monnet Ispat Ltd since long but when I read today's news I thought I need to write it today on it....

First the news:

NMDC-Monnet JV to acquire coal blocks

Pramugdha Mamgain NEW DELHI
THE country’s largest iron ore mining company National Mineral Development Corporation (NMDC) is forming a 51:49 joint venture with Monnet Ispat & Energy to acquire and develop coal blocks in India. NMDC will have a majority stake in the JV company, which will bid for coal mines with reserves of 200 to 300 million tonne.
A memorandum of understanding for the proposed JV was signed on Tuesday. “As part of the agreement, Monnet will provide technology and expertise for coal mining,” said Ajay Bhatt chief financial officer of Delhi-based sponge iron maker Monnet Ispat. The coal will either be sold commercially or be used internally for power projects that the JV may intend to set up in future. Besides developing its own mines the JV will also help explore and develop mines for other companies, Mr Bhatt said. The new venture is expected to be set up in the next few months and investments in the company will depend on the size of the coal mine to be developed. According to mining experts, the development of a 100 mt mine may entail investment of Rs 200 to 250 crore on an average.
NMDC has set a target to own at least 2 billion tonne coal assets in the country over the next five years. The iron ore miner has two thermal coal blocks in Madhya Pradesh. Sandeep Jajodia-led Monnet Ispat runs a 5-lakh tonne steel plant at Raipur in Chhattisgarh. It is establishing a 1.5 mt integrated plant along with an 80-mw power generation unit at the same location.

My Analysis:
Monnet Ispat Ind is having a very low eq of 52 cr which is peanuts for a steel and power conglomarate.That is the first positive I see for investment.If one will see, all steel and Power Cos have very big eq that ranges from 300 cr to 3000 cr and even more.....
Second , Monnet Ispat is giving constantly excellent results qr to qr and Mar '10 has end with an eps of 54 which gives an P/E of 6.5 which according to me is excellent value buy.
Third  reason I like about Monnet  is , it is doing the right thing at right time.Joint venture with NMDC speaks about the management.So we can say that management is excellent.
Creating a joint venture in Coal Mines is an appropriate steps.
After looking above facts and reading annoucement at bse of buy back etc, I feel, it is a blue chip in making ......as usual, DD is must before investing......