JSW Energy has been inclining towards renewable energy (RE) over the last couple of years, as is evidenced by their locked-in RE portfolio of 15.3GW at end-Q2FY25 in comparison to 6GW in H2FY23. It has also emerged as the H1 bidder for O2 Power. Earlier last week, JSW Neo Energy, a wholly owned subsidiary of JSW Energy, signed a definitive agreement to acquire 4.7 gigawatt (GW) from O2 Power for a total enterprise value of Rs 12,468 crore. The transaction entails acquisition of O2 Power Midco Holdings and O2 Energy SG. O2 Power has an operational portfolio of over 1.2GW and a total locked-in portfolio of 4.7GW, which brings JSW Energy’s locked-in portfolio to 20.4GW (including NTPC’s 400MW solar project LoA announced recently) and locked-in EBITDA to Rs 147.5 billion, stated a report by ICICI Securities. It further added that the operational capacity of the portfolio is set to increase to 2.3GW by end-Q1FY26. Further, O2 Power has a C&I play of 0.6GW, adding to JSW Energy’s own 3.7GW C&I portfolio.
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O2 Power, the perfect foil
ICICI Securities said that O2 Power’s portfolio complements JSW Energy’s with: 1) 24 per cent more capacity added to JSW Energy’s 20GW locked-in portfolio; 2) contributing 0.6GW to the C&I portfolio (JSWE’s C&I: 3.1GW); 3) a good blend of solar, wind, hybrid and FDRE; 4) synergising O&M with five shared states among them; 5) quality off-takers such as SJVN, SECI, NTPC, etc.; and 6) an experienced management team.
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Per the report, the portfolio offers a blended tariff of Rs 3.37/kWh and locked-in EBITDA of Rs 37.5 billion. JSW has quoted an acquisition value of Rs 125 billion. “This, combined with the additional capex requirement of Rs 130 billion–140 billion, amounts to an EV/EBITDA of 6.8x–7.1x,” it said.
Outlook
JSW Energy is working towards stepping up its game to address the opportunities arising from energy transition.
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