Small Talk: Global energy trends bode well for AIM newcomer Nandan Cleantec

Nandan develops varieties of Jatropha, an oilseed plant, to make biodiesel

The latest global outlook from the International Energy Agency (IEA) has reiterated the growing importance, and growing influence, of fast-growing countries like China and India. Published last week, its message was crystal clear: "The dynamics of energy markets are determined more and more by emerging economies."

On the IEA's projections, China will consume "nearly 70 per cent more energy than the United States" by 2035. "The rates of growth in energy consumption in India, Indonesia, Brazil and the Middle East are even faster than in China," it added.

The report came out on Wednesday, just as Nandan Cleantec began life as public company with its debut on London's junior market. The timing couldn't have been better for the India-focused biofuels producer, which has its sights set on the growing demand for alternative energy sources, both within and beyond the country.

The newly AIM-listed business develops hybrid varieties of Jatropha, an oilseed plant that is used as feedstock, to produce biodiesel. Jatropha can grow on marginal scrubland (and therefore doesn't compete with food crops) and has proved to be hardy, showing "wide environmental tolerance", according to the company.

"It is found in both the seasonally dry tropics as well as equatorial regions," Nandan said.

In recent years, Nandan, which also has a nutraceutical division, has invested in developing Jatropha hybrids and has come up with the somewhat unimaginatively named "Nandan 1", which yields 1.5 to two times more fruit (which results in more oil) than the standard Jatropha plant.

Looking ahead, the company said its next-generation hybrid, which yields "significantly more than Nandan 1" was in the process of being patented and ready to be rolled out across its estate.

Alongside developing plant varieties, Nandan is also pursuing ways to develop its land bank, not only in India, where it is in talks with state governments, but also beyond the subcontinent, with initial agreements in place to develop estates as far afield as Indonesia, Botswana and Rwanda.

Beyond this, the company owns an advanced biodiesel plant in India, which is in profit and which Nandan says "has significant scope to increase revenues through improved utilisation". "Admission to AIM is a logical next step for us," the company's executive chairman, Prasad Moturi, said last week. "We have a strong, profitable and proven business model and are excited about the opportunities open to us as the world looks to diversify its energy supply."

The City was welcoming, with Killik & Co analysts highlighting the benefits of the focus on the Jatropha plant. "In our view, the reliance on a non-food crop is crucial factor in the investment case, as it removes perhaps the two greatest barriers to investing in any biofuels producer, firstly the inherent volatility in margins that is associated with being exposed to food crops and, secondly, the powerful ethical and political debate of 'food versus fuel'," they told clients.

The higher yields developed by Nandan are also important, they said. "One of the key reasons for investing in Nandan is the superior yields the group can generate from its Jatropha crop. While Jatropha has many attractive qualities as a biofuel crop... wild Jatropha has historically not been able to generate the oil yields required to be economic across the value chain," Killik explained. "Nandan has spent more than 10 years developing hybrid variants... each of which has distinct and superior qualities over wild Jatropha."

The result is an attractive opportunity, according to the broker. "We view Nandan as an interesting play on the growth in demand for biofuels, driven by a combination of legislative change mandating reduced carbon emissions and continued concerns over energy security, against a backdrop of growing global demand for energy," it said.

The listing saw Nandan's broker and nomad, Arden Partners, place shares at 60p apiece, raising around £16.1m before expenses. That gave the business a market value on admission of around £166m, with the listing proceeds earmarked for the development of a large and sustainable supply of Jatropha to produce biodiesel. And if you're keeping score, the first couple of days have proved positive, with Nandan's shares ending the week at 72p, well above the listing price.

Suggested Topics
PROMOTED VIDEO
News
Down time: an employee of Google uses the slide to get to the canteen
businessHow bosses are inventing unusual ways of making us work harder
News
Actor, model and now record breaker: Jiff the Pomeranian
news
News
REX/Eye Candy
science
News
i100
Sport
Alexis Sanchez celebrates after scoring his first goal for Arsenal in the Champions League qualifier against Besiktas
sportChilean's first goal for the club secures place in draw for Champions League group stages
Arts and Entertainment
Amis: 'The racial situation in the US is as bad as it’s been since the Civil War'
booksAuthor says he might come back across Atlantic after all
Extras
indybest
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Life and Style
Google Doodle celebrates the 200th birthday of Irish writer Sheridan Le Fanu
tech
Arts and Entertainment
Vinyl demand: a factory making the old-style discs
musicManufacturers are struggling to keep up with the resurgence in vinyl
News
i100
News
In Eternal Sunshine of the Spotless Mind Jim Carrey and Kate Winslett medically erase each other from their memories
scienceTechnique successfully used to ‘reverse’ bad memories in rodents could be used on trauma victims
Arts and Entertainment
Singer Pixie Lott will take part in Strictly Come Dancing 2014, the BBC has confirmed
tv
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

C# Developer (C#, ASP.NET Developer, SQL, MVC, WPF, Real-Time F

£40000 - £48000 per annum + benefits+bonus+package: Harrington Starr: C# Devel...

C# Swift Payment Developer (C#, ASP.NET, .NET, MVC, Authorize.N

£45000 - £60000 per annum + benefits+bonus+package: Harrington Starr: C# Swift...

DevOps Engineer - Linux, Shell, Bash, Solaris, UNIX, Salt-Stack

Negotiable: Harrington Starr: A fast growing Financial Services organisation b...

Trade Desk FIX Analyst - (FIX, SQL, Equities, Support)

£50000 - £60000 per annum + excellent benefits: Harrington Starr: An award-win...

Day In a Page

Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference
America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

America’s new apartheid

Prosperous white districts are choosing to break away from black cities and go it alone
Amazon is buying Twitch for £600m - but why do people want to watch others playing Xbox?

What is the appeal of Twitch?

Amazon is buying the video-game-themed online streaming site for £600m - but why do people want to watch others playing Xbox?
Tip-tapping typewriters, ripe pongs and slides in the office: Bosses are inventing surprising ways of making us work harder

How bosses are making us work harder

As it is revealed that one newspaper office pumps out the sound of typewriters to increase productivity, Gillian Orr explores the other devices designed to motivate staff
Manufacturers are struggling to keep up with the resurgence in vinyl records

Hard pressed: Resurgence in vinyl records

As the resurgence in vinyl records continues, manufacturers and their outdated machinery are struggling to keep up with the demand
Tony Jordan: 'I turned down the chance to research Charles Dickens for a TV series nine times ... then I found a kindred spirit'

A tale of two writers

Offered the chance to research Charles Dickens for a TV series, Tony Jordan turned it down. Nine times. The man behind EastEnders and Life on Mars didn’t feel right for the job. Finally, he gave in - and found an unexpected kindred spirit
Could a later start to the school day be the most useful educational reform of all?

Should pupils get a lie in?

Doctors want a later start to the school day so that pupils can sleep later. Not because teenagers are lazy, explains Simon Usborne - it's all down to their circadian rhythms
Prepare for Jewish jokes – as Jewish comedians get their own festival

Prepare for Jewish jokes...

... as Jewish comedians get their own festival
SJ Watson: 'I still can't quite believe that Before I Go to Sleep started in my head'

A dream come true for SJ Watson

Watson was working part time in the NHS when his debut novel, Before I Go to Sleep, became a bestseller. Now it's a Hollywood movie, too. Here he recalls the whirlwind journey from children’s ward to A-list film set
10 best cycling bags for commuters

10 best cycling bags for commuters

Gear up for next week’s National Cycle to Work day with one of these practical backpacks and messenger bags
Paul Scholes: Three at the back isn’t working yet but given time I’m hopeful Louis van Gaal can rebuild Manchester United

Paul Scholes column

Three at the back isn’t working yet but given time I’m hopeful Louis van Gaal can rebuild Manchester United
Kate Bush, Hammersmith Apollo music review: A preamble, then a coup de théâtre - and suddenly the long wait felt worth it

Kate Bush shows a voice untroubled by time

A preamble, then a coup de théâtre - and suddenly the long wait felt worth it
Robot sheepdog technology could be used to save people from burning buildings

The science of herding is cracked

Mathematical model would allow robots to be programmed to control crowds and save people from burning buildings
Tyrant: Is the world ready for a Middle Eastern 'Dallas'?

This tyrant doesn’t rule

It’s billed as a Middle Eastern ‘Dallas’, so why does Fox’s new drama have a white British star?