November 26

JSW Energy MD says no new capacity to turn power sector profitable

NEW DELHI: Power sector will be a profitable business again in two years as no fresh capacity is being added to cater to the rising demand, JSW Energy managing director Prashant Jain said, adding the company seeks to tap the opportunities by scaling up its capacity through acquisitions. 

Jain said there is no stressed power plant that the company has not evaluated as it has a huge appetite for acquisitions. The company is also betting on big on electric cars manufacturing and will unveil its plans on its factory in Maharashtra in six months. 

“We are very optimistic. Power demand grew 6.1% last year and this year second quarter it was close to 7%. I feel trend now will be 6.5%-7.5%. Lot of investments were committed in the sector earlier due to which 123 GW of capacity came up as against 88 GW. That excess capacity of close to 35 GW and lower demand created a problem in the power sector. As no new investments are taking place, a balance will be created in 2-3 years. You will see fresh investments in four years and we feel lot of consolidation is going to happen,” Jain said. 

He said the company is evaluating stressed assets on various matrix. “As and when assets go to the NCLT and even outside, we will be interested. We are looking at assets based on domestic coal and the logistics cost is minimum and where we can do projects at low cost so that cost of power is low. The problems of power purchase agreement (PPA) and coal can be resolved over time and these delays can be factored in with proper capital structure,” he said. 

Jain said JSW Energy has been working with the government of Maharashtra for setting up the electric car project in the state. “In next six months, we will be announcing our concrete plans on this project,” he said adding that the will be targeting segments which are fast moving. “This car will be for Indian roads, Indian people and meeting aspiration of Indian working class. We are anticipating close to .`6,500 crore of capex,” he said.

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