Jindal Jhajjar Power to raise up to ₹2,100 cr debt to acquire thermal plant

Jindal Jhajjar Power plans to raise up to Rs 2,100 crore via a term loan and NCDs to acquire a 1,320 MW Haryana thermal plant from Apraava Energy at an enterprise value of Rs 4,000 crore

Jindal Jhajjar Power Ltd (JJPL) is raising up to Rs 2,100 crore through a mix of loans and debentures to acquire a 1,320 MW thermal power plant in Haryana. JJPL is acquiring this asset from Apraava Energy Private Limited at an enterprise value of Rs 4,000 crore.

 

How will JJPL raise the acquisition debt, and what are the tenors?

 

The entity will raise around Rs 1,500 crore through a term loan and the remaining amount through non-convertible debentures (NCDs). The term loan will have a tenor of 11.25 years, while the NCDs will be redeemed in the second and third year, according to India Ratings’ statement.

 

What rating did India Ratings assign, and what is the rationale?

 

The rating agency has assigned an “AA+” rating to the bank loans and the proposed issue of NCDs. The rating reflects the strong operational and strategic linkages between JJPL and its parent, Jindal Power Ltd (JPL).

 

What is the cash consideration, and how will the deal be funded?

 

The total cash consideration for the transaction would be around Rs 3,006 crore, which JPL will fund in a debt-to-equity ratio of 70:30. JJPL will raise up to Rs 2,100 crore, and the parent, JPL, will infuse the remaining amount in JJPL as promoter contribution.

 

What is the target’s debt and operating performance?

 

The power unit has an existing debt of Rs 1,264 crore and Rs 350 crore in cash on the books. The entity that houses the power plant has shown healthy operational performance, leading to an EBITDA of Rs 620 crore during the financial year ended March 2025.

 

According to India Ratings, the final cash consideration will be determined closer to the transaction closing date. As per the draft sanction letter, the power plant entity will be merged into JJPL within 18 months from the date of completion of the acquisition.

 

What is the plant’s PLF track record and coal supply position?

 

It has maintained a strong operational track record, achieving a plant load factor (PLF) above normative levels since FY15. The PLF improved to over 74 per cent during FY25 from 71 per cent in FY24, driven by higher demand. This performance is supported by reliable coal supply under the fuel supply agreement (FSA) with Coal India Ltd and its subsidiaries, adequate plant stock, with contingency use of imported coal during shortages, the agency added.