|Photo: Live Mint|
JSW Energy Ltd has also agreed to acquire the 1,000MW (4X250) thermal power plant located at Tamnar, Chhattisgarh from Jindal Steel & Power Limited (JSPL). JSW Energy has also got fair trade regulator CCI's approval to acquire this 1,000 MW power plant in Chhattisgarh from Jindal Steel and Power Ltd (JSPL).
Under the deal announced in May, the Sajjan Jindal-led firm was to purchase the power plant in Raigarh for Rs.6,500 crore with certain conditions.
But as transmission congestion in the region eased and stranded gas capacities came back on stream, short-term or merchant power prices began to fall. This impacted JSW Energy’s realizations, which fell 8% in 2014-15 and 3% in the last fiscal year. With merchant power rates remaining depressed and the Union government encouraging state utilities to purchase short-term electricity contracts through competitive bidding or reverse auction system, the firm’s realizations are expected to remain under pressure. The concerns have made analysts cautious, with some even paring their earnings estimates for the current and next fiscal years.
JSW Energy Ltd in July, 2016 said that its subsidiary has sold 26% stake in South African Coal Mining Holdings Ltd (SACMH) to meet regulatory norms.
“JSW Energy Natural Resources South Africa (PTY), a step down subsidiary of the company in South Africa has disposed of 26% stake in its subsidiary, South African Coal Mining Holdings (SACMH),” JSW Energy Ltd informed the BSE.
Factoring all these concerns and the share price correction, some analysts feels that an upside potential of 15-20% from the CMP of Rs.77.90 is possible. JSW Energy is engaged in the business of power generation, power trading and transmission, and mining and equipment manufacturing.
Bibliography: (i) The Business Standard
(ii) Live Mint, etc