JSW Energy tweaks growth strategy

Decides to acquire stressed assets & not to invest in greenfield projects; no plans of equity dilution due to strong balance sheet

JSW Energy, part of the JSW Group, has tweaked its growth strategy. The company will not pursue investments in green field projects but go in for the acquisition of stressed power projects. Further, the company will concentrate at this point in time to increase generation capacity in coal, hydro and lignite and not to venture in wind and solar power projects.

JSW Energy Chairman Sajjan Jindal, on the sidelines of annual general meeting, said the company would focus on the acquisition of stressed assets and there won’t be investment in green field projects. However, he declined to divulge more.  

The company is currently engaged in the completion of acquisition of 300 Mw Baspa II and 1,091 Mw Karcham Wangtoo hydro power projects from Jaiprakash Power Ventures and 1,050-Mw coal-based plant of Monnet Power Company located in the coal rich belt of Angul in Orissa. “With an enabling regulatory architecture, clarity on medium to long term outlook, availability of many stressed power assets,and strong balance sheet, the company is positioned to explore organic and inorganic growth opportunities to increased installed capacity. As of now there are no plans of equity dilution for acquisition. When required, the company may explore this option in future,” Jindal said.

Further, Jindal said  that the company hopes to complete the acquisition of 300 Mw Baspa II and 1,091 Mw Karcham Wangtoo hydro power projects from Jaiprakash Power Ventures by end of second quarter or by the end of current fiscal 2015-16.

“This acquisition will be earnings accretive from day one and is likely to further enhance our consolidated profits and cash flows,” he noted. He added that company's aggregate power generation capacity will enhance to 4,531 Mw from the present level of 3,140 Mw.

Besides, Jindal said the company has recently signed a non binding memorandum of understanding for initiating a due diligence process for the potential acquisition of a majority stake in Monnet Power Company which is setting up 1,050 Mw coal based project in Orissa. “There is no dead line fixed for completion of due diligence for Monnet Power's coal project,'” he added.