Purpose of IPO:
- To partially finance construction and development of the Identified Projects aggregating to 2,790 MW in capacity; 400 KV transmission project and mining venture.
- Repayment of corporate debt.
- General Corporate Purposes.
Promoters:
| Name | Acquisition Cost per share |
| Mr. Sajjan Jindal | Rs.0.86 |
| Mr. P.R. Jindal | Rs.2.70 |
| Mrs. Sangita Jindal | Rs.1.68 |
| Sun Investments Private Ltd | Rs.2.25 |
| JSW Investments Private Ltd | Rs.5.95 |
Company:
- Incorporated as Jindal Tractebel Power Company Limited on March 10, 1994.
- JSW Energy is part of O.P. Jindal group.
- Present operational capacity is 860 MW.
- Capacity under construction or implementation phase is 2790 MW of which 135 is already commissioned.
- Proposed power generation projects under developement are 7740 MW.
India Power Industry:
- Energy deficit averaged 8.9% and the peak power deficit averaged 12.8% during Fiscal 2003 to Fiscal 2009.
- As on June 30, 2009, the total installed power generation capacity in India was 150,323.4 MW.
- Demand for energy increased at a CAGR of 6.0% from Fiscal 2003 to Fiscal 2009 and during the same period, supply of energy increased at a CAGR of 5.6%.
- Of the total installed power generation capacity in India, State Electricity Boards accounted for 51.0%, Central Public Sector Units 32.6% and private sector 16.6%.
- As on June 30, 2009, Thermal power plants powered by coal, gas, naphtha and oil accounted for approximately 63.89%, Hydro electric plants accounted for 24.56%, Nuclear power plants accounted for 2.74% Renewable energy sources accounted for approximately 8.81%
Thermal Power Generation:
- Thermal plants can be based on coal, lignite, gas, LNG or liquid fuel.
- The Geological Survey of India estimates that coal reserves stood at 287 billion ton as of January 1, 2007, with approximately 89% of these being of non-coking grade, which is primarily used for power generation.
- the geographical distribution of these coal reserves is in the states of Bihar, Jharkhand, Madhya Pradesh, Chhattisgarh, West Bengal, Orissa and Andhra Pradesh.
- the geological reserves of lignite are approximately 35.6 billion ton, according to National
- Electricity Plan (April 2007) which can also be used for Power Generation.
- Natural gas is increasingly used in Combined Cycle Gas Turbine power stations in view of the very high efficiencies resulting from the use of advanced technology gas turbines.
Hydro Power Generation:
- Hydroelectric power generation is based on the sustainable development of river basins.
- Hydroelectric potential in India is approximately 84,000 MW at a plant load factor of 60%.
- On average, India’s economic potential is about 16.75% of its total theoretical potential.
- The geographical spread of hydroelectric potential in India is in six major river systems:
- Indus
- Brahmaputra
- Ganga
- central Indian river system
- the east flowing river system
- the west flowing river systems
- The hydro potential of a river depends on its run-off and is directly related to rain and snow fall levels.
- India has one of the lowest per capital storage rates, and approximately 80% of the surface water from the rivers flow in to the sea is unutilized.
Nuclear Power Generation:
- Nuclear power is a clean, environment friendly and economically viable source of power generation.
- As nuclear fuel is a concentrated source of energy, quantities of waste are much smaller than in the case of coal-based stations.
- India has limited uranium resources but vast thorium resources.
- The potential of nuclear energy in India from thorium resources is equivalent to India's total electricity requirements for several hundreds of years considering current consumption levels.
- Plans have been made to achieve 20,000 MW of Nuclear power by 2020.
- The three stages of the nuclear power programme are:
- Pressurized Heavy Water Reactors, which use natural uranium;
- Fast Breeder Reactors, which use plutonium-based fuel and
- Advanced Nuclear Power Systems, which use thorium.
- Nuclear power projects are capital intensive.
- On August 1, 2008, the International Atomic Energy Agency (“IAEA”) approved the Safeguards Agreement with India and in September, 2008, the Nuclear Suppliers Group approved an exemption from its nuclear cooperation guidelines for India, allowing Nuclear Suppliers Group member states to provide nuclear materials, technologies, and equipment to India.
- India has already signed nuclear fuel supply agreements with France and the United States.
Solar Power Generation:
- The process of converting solar radiation, or sunlight into electricity using solar cell device is referred to as Solar Photovoltaic Generation, or SPV.
- A solar cell, when exposed to sunlight, generates electricity.
- The magnitude of the electric current generated depends on the intensity of the solar radiation, ambient temperature, exposed area of solar cell and type of material used in fabricating the solar cell.
- India’s SPV potential is 20 MW per square kilometer.
Wind Power Generation:
- India’s wind power development programme was initiated in 1983-84.
- India now ranks 5th in the world after Germany, USA, Spain and Denmark in Wind Power generation.
- the technically viable amount of wind power which can be exploited economically in India is 13,000 MW and India’s gross wind power generation potential is 45,000 MW.
- Wind turbines generally have three blades, which rotate with wind flow and are coupled to a generator through either a gear box or directly.
- The blades rotate around a horizontal hub connected to a generator.
- The power produced by the generator is controlled automatically as wind speeds vary.
- After the identification of an appropriate site, the site is mapped for a period of one to two years after which wind turbines are installed over a period of two to three months at appropriate distances between them to minimize any potential disturbances between turbines.
Captive Power Generation:
- Another segment of power generation in India is the captive power segment.
- Captive power refers to power generation from a project set up for industrial consumption.
- As on June 2009, captive power capacity of 19,509.49 MW accounts for 11.5% of the total installed capacity in India.
- The dependence on captive power has been increasing, due to the continuing shortage of power and
- India’s economic growth.
- The Electricity Act 2003 provided additional incentives to captive power generation companies to grow by exempting them from licensing requirements.
- This has resulted in an increase in captive power capacity.
- Reliability of power supply and better economics are other factors driving industries to develop captive generation plants.
Merchant Power Generation:
- Merchant power plants (“MPPs”), generate electricity for sale in the open wholesale market.
- MPPs do not have long-term PPAs and are generally built and owned by private developers at their own cost.
- MPPs can generally be categorized into different classes based on the amount of time that the facility is operating and their variable costs to produce electricity.
- A facility’s variable cost to produce electricity, in turn, determines the order in which it is used to meet fluctuations in electricity demand.
- Base-load facilities are those that typically have low variable costs and provide power at all times.
- Base-load facilities are used to satisfy the base level of demand for power, or “load,” that is not dependent upon time of day or weather.
Power Trading:
Indian Energy Exchange (“IEX”) is India’s first nation-wide automated and online electricity trading platform.
Power Transmission:
- In India, the transmission and distribution system is a three-tier structure comprising regional grids, state grids and distribution networks.
- Most interstate transmission links are owned and operated by the Power Grid Corporation of India Limited, or PGCIL, though some are jointly owned by the State Electricity Boards, or
- SEBs.
- In addition, PGCIL owns and operates many inter-regional transmission lines (which are a part of the national grid) to facilitate transfer of power from a region of surplus to one with deficit. State grids and distribution networks are primarily owned and operated by the respective SEBs or state governments (through state electricity departments).
Power Distribution:
- Power distribution is a critical link between power generation, power transmission and end users of power.
- As a result of high AT&C losses and the historically weak financial health of SEBs, investments in the distribution sector have been relatively low and the growth and maintenance of distribution systems in India has been poor.
Peer Comparision:
| Company | Installed MW | Price | Equity Shares | MCap |
| NTPC | 30,644 | 207.05 | 824.55 | 1,707 |
| Tata Power | 2,785 | 1361.05 | 23.71 | 323 |
| Neyveli Lignite | 2,490 | 148.50 | 167.77 | 249 |
| NHPC | 5,175 | 32.35 | 1230.07 | 398 |
| Reliance Power | - | 145.25 | 239.68 | 348 |
| JSW Power | 860 | 100 | 164.70 | 164 |
| JSW Power | 860 | 115 | 164.70 | 189 |
Source: InvestingMantra Research, BSE, JSW Energy RHP, Central Electricity Authority, National Electricity Plan (April 2007), CERC
