JSW Energy rallies 4% as PE investors close in on stake in green power arm

JSW Energy shares surged 4 percent in the morning trade on September 11 on reports that private equity investors TPG, Tokyo Electric Power Company (Tepco) and Brookfield are in advanced talks to buy a stake in JSW Neo Energy.

As of 10:05am, the JSW Energy stock was trading at Rs 411.80 on the National Stock Exchange, up 4.37 percent.

The PE trio is planning to pick up a minority stake in JSW Neo Energy, a subsidiary of listed JSW Energy, a newspaper report has said. It is likely that a deal with two of these funds will be finalised in the coming weeks, the Economic Times reported, citing sources. JSW Group aims to raise up to $500 million from this stake sale, which will likely be utilised for expanding its presence in the renewable energy space.

JSW Neo Energy is likely to serve as the entity through which JSW Group consolidates its upcoming green power projects.

JSW Energy intends to transfer its existing hydro energy projects into subsidiaries under JSW Neo Energy as part of a strategic move to streamline its renewables portfolio, establish an efficient fundraising structure, and unlock value for shareholders, according to the report.

TPG, a US private equity firm with existing investments in India, including BookMyShow and Dream11, previously invested $1 billion into Tata Motors through its Rise Climate fund. Tepco holds a stake in ReNew Power through its joint venture with Chubu Electric Power Co, while Canadian firm Brookfield Asset Management is actively seeking to expand its renewable energy portfolio in India. These investments underscore the appeal of the Indian renewable energy sector to global investors.

JSW Neo Energy recently made a significant acquisition by purchasing 1.75 GW of renewable energy generation capacity from Mytrah Energy for Rs 10,530 crore. This acquisition comprises wind energy capacity of 1.33 GW and solar energy capacity of 422 MW, primarily located in southern, western and central India.

This acquisition also marked the largest one made by JSW Energy since its inception, increasing the company’s operational capacity by more than 36 percent, from 4.81 GW to 6.56 GW. JSW Energy has set ambitious targets for its operational power generation capacity, aiming to achieve 10 GW by 2025 and 20 GW by 2030, aligning with the company’s commitment to expanding its presence in the renewable energy sector.

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