GMR Kamalanga power unit a value accretive acquisition for JSW Energy

Analysts see development as favourable as valuations seem reasonable, JSW Energy's robust debt-equity ratio remains intact and gains are expected to accrue from day one

JSW Energy’s share purchase agreement to acquire GMR Kamalanga Energy — which owns and operates a 1,050-Mw coal-fired power plant — enthused the Street.

The acquisition is in the right direction as it puts JSW Energy’s robust balance sheet and cash flows to better use, and gains are expected to accrue from the first day. Valuations appear reasonable too, and the deal does not change JSW Energy’s debt-equity ratio, which remains at less than 1x.

The acquisition of three units of 350 Mw each is valued at an enterprise value (EV) of Rs 5,321 crore, implying an EV per Mw of Rs