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Investment Rationale
JSW Energy Ltd, a group company of Jindal South West group, is
the first Independent Power Producer in Karnataka, India. JSW
energy, already, has presence in coal mining, equipment
manufacturing, Transmission and power trading and, now, is aiming
to enter distribution. Currently, major chunk of the revenue is derived
from power generation.
The business integration model (Both backward integration and
forward integration) that the company aiming for makes it a unique
one among its peers.
JSW Energy, unlike others, has a more or less balanced mix of
merchant power and Power purchase agreements (PPAs) in the
sales portfolio.
The company has the operational capacity of 2,030 MW, apart from
1,110 MW of generation capacity under construction. By 2016, the
company aims to generate 12,070 MW. It plans to enter in the power
distribution generation through non-conventional energy sources and
tie-ups.
There are some projects in pipeline which are expected to be
operational beyond 2015 as well giving long revenue visibility as
well.
Risks
Rising coal prices and falling trend of merchant realization may
impact the profitability of the company.
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