JSW Energy NSE 0.46 % plans to raise about $500 million through a strategic stake sale in its green energy business as the Sajjan Jindal Group company aims to to catch up with peers such as Tata Power NSE -2.03 % and Adani Power that have stepped up investments into non-conventional energy.
The proceeds would be used to ramp up generation of non-conventional power. Feelers have gone to alternative energy focused financial investors, pension and sovereign asset managers and big ticket private equity firms, multiple sources with knowledge of the matter told ET. “We have launched a formal process. With the current traction toward green energy assets, we hope to get better traction for the subsidiary,” said one of the sources cited above.
The company has hired Morgan Stanley to run a formal process. Emails sent to JSW Group remained unanswered. Morgan Stanley declined to comment. This fundraising will be in addition to a $700-million green bond, which JSW Hydro Energy raised earlier this year for its projects. The company has renewable businesses including hydro, wind and solar, which collectively form about 30 percent of the power business. Going forward, the share of thermal is likely to go down with rising volumes of renewable power generations.
By financial year 2025, renewables are estimated to be over two-third of the portfolio with thermal power reducing to 32 percent, show an investor presentation by JSW Energy. The company projects an 18 percent CAGR growth in power generation until FY30. It has a total capacity of 4.6 GW with over one-third of it coming from non-conventional energy. Total capacity is anticipated to be 20GW by FY30 as green energy is likely to emerge as the flagship business with 84 percent share. During the
September quarter, JSW Energy reported a 3.69 percent fall in its consolidated net profit to Rs 339 crore. On a comparable basis, adjusting for exceptional finance cost, profit after tax (PAT) stood at Rs 414 crore as compared with the reported PAT (consolidated net profit) of Rs 352 crore in the corresponding period last year.
In the recent past, India has seen the renewable energy expansion driven by large corporate groups and private equity-backed energy platforms, aiming to tap increasing appetite toward non-carbon fuel resources. Earlier, French oil and gas major Total SE picked up a stake in Adani Green. In October, Reliance Industries has bought out Norway-based solar panel manufacturer REC Solar Holdings for around $771 million and acquired 40% stake in Shapoorji Pallonji Group’s Sterling & Wilson Solar.
Sterling & Wilson Solar as well as REC. PE funds and strategic investors have pumped in $70 billion in renewable energy across the country in the past seven years, power minister RK Singh has said in June.
At present, India’s installed renewable energy capacity is about 95 GW, including 40.5 GW of solar power. Capacity addition is expected to be 10.5-11 GW in financial year 2021-22, led by a strong project pipeline of about 38 GW, according to ratings firm ICRA. The sector is expected to witness investments of Rs 3.5 lakh crore over the next four years, increasing its share to 34% of the overall installed power generation capacity by March 2025 from 25% in March 2021, led by the solar power segment, ICRA said in a report.
Source : Economic Times
