JSW Energy ready for acquisitions

Not being able to expand its power generation capacity due to lack of coal availability, the Sajjan Jindal-promoted JSW Energy is looking to acquire power plants. It has a war chest ready to start acquiring assets.

"We have a cash chest of around Rs 900 crore as on March 31 for acquiring assets. We are looking at power plants with a size of over 1,000 Mw," Sanjay Sagar, CEO, JSW Energy, told Business Standard.

The company is already assessing projects that fit its criteria, such as fuel availability and sale prospects of power. The firm is only interested in thermal power projects, which can be "at any stage of construction and commissioning".

JSW Energy also plans to use the equity it had planned to invest in its own power plants, which have been put on the backburner. It has frozen the development of four power projects with a combined capacity of 7,000 Mw - in

West Bengal, Chhattisgarh, Jharkhand, and expansion of its power plant at Jaigarh, Ratnagiri, which is currently operational.

The firm, which has a generation capacity of 3,140 Mw, plans to expand it to 11,770 Mw. It has received clearances for the Chhattisgarh and West Bengal projects. Land has been acquired for three of the projects, including the expansion of Ratnagiri.

However, coal supply constraints and worries over thermal-based generation with regard to the policy made them put these plans on the backburner. "Without clarity on the coal issues, it would be very unreasonable to go and sink shareholder money on a new thermal power project," said Sagar.

Many states and their discoms are delaying bids for power procurement, as they are waiting for rules on standard bid documents to be notified.

While Sagar claimed the company has done the initial work on the project as a developer, the firm needs support in the form of increased supply by Coal India. "Or, we would like to see clarity on coal block auctions. We do not see either of these happening," he said.

The company, which recently posted 49 per cent increase in its fourth quarter net profit at Rs 335.6 crore, has also announced a 20 per cent dividend for its shareholders.