JSW Energy gains as arm acquires 4.7-GW renewable energy units

JSW Energy rallied 3.84% to Rs 649.05 after its wholly-owned subsidiary, JSW Neo Energy (JSWNEL) acquired a 4,696 MW renewable energy platform from O2 Power Midco Holdings and O2 Energy SG for Rs 12,468 crore.

JSW Neo Energy inked agreements with O2 Power Pooling Pte., O2 Power SG Pte and certain individuals to acquire O2 Power Midco Holdings Pte. and O2 Energy SG Pte. and their subsidiaries having a consolidated operational and under construction / development renewable energy portfolio of 4.7 GW for an enterprise value of $1.47 billion (Rs 12,468 crore).

This transaction is however, subject to approval of Competition Commission of India (CCI) and other customary approvals standard to a transaction of this size.

 

Upon completion of the transaction, the O2 entities will become subsidiaries of JSWNEL and step-down subsidiaries of JSW Energy.

The company has set a target to reach 20 GW capacity before FY 2030. The renewable assets under this transaction will be acquired by JSW Neo Energy. This acquisition would help the company in achieving its renewable-led capacity growth target of 20 GW before FY 2030.

The proposed acquisition is expected to be completed on or before 26 May 2025, subject to fulfilment of the conditions under the definitive agreements.

O2 Power is a renewable energy platform with a capacity of 4,696 MW where 2,259 MW will be operational by June 2025, 1,463 MW is currently under construction, and an additional 974 MW are in the pipeline, all scheduled for commissioning by June 2027.

The platform has a blended average tariff of Rs 3.37/KWh with remaining life of about 23 years. The capacities are spread across seven resource-rich states of India. This acquisition will leapfrog the companys locked-in generation capacity by 23%, from 20,012 MW to 24,708 MW.

Sharad Mahendra, joint MD and CEO of JSW Energy, said: We are thrilled to announce the acquisition of O2 Powers 4.7 GW renewable energy platform which is JSW Energys largest acquisition since inception. This landmark acquisition strengthens our positioning as a leading player in Indias energy sector. These highquality assets strengthen our operational footprint across key resource-rich states. It gives me a great joy to welcome the experienced management team and employees of O2 power to JSW Energy family. By combining our strengths, I am confident that we will deliver exceptional value to our stakeholders.

Pritesh Vinay, director (finance) and CFO of JSW Energy, said: The acquisition of O2 Powers renewable energy platform is significantly value accretive to the shareholders of JSW Energy. This is a very attractive acquisition both from Build vs Buy trade off as well as from a quality and value perspective when compared to all acquisitions in this space over recent times, and is consistent with our long track record of being prudent in capital allocation and focusing on high cash returns projects above our hurdle rate of midteen Equity IRR. This gives us an opportunity to leapfrog our growth ambitions. JSW Energy remains focused to pursuing value-accretive opportunities that support our ambitious growth objectives in the power sector.

JSW Energy is primarily engaged in the business of generation of power, with principal places located at Vijayanagar (Karnataka), Ratnagiri (Maharashtra), Nandyal (Andhra Pradesh), and Salboni (West Bengal).

The companys consolidated net profit marginally increased to Rs 853.25 crore in Q2 FY25 as against Rs 850.16 crore posted in Q2 FY24. Net sales marginally declined to Rs 3,237.66 crore in Q2 FY25 from Rs 3,259.42 crore reported in Q2 FY24.

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