JSW Energy plans Rs40,000 crore investment in 8,000MW projects

The power producer is implementing projects worth 3,200MW in Maharashtra, 1,320MW in Chhattisgarh and 1,600MW in West Bengal and plans to become an over 11,000MW company by 2015

JSW Energy Ltd, the first company to be listed on the bourses in 2010, on Monday said that it plans to invest around Rs40,000 crore in developing power projects of 8,000MW, reports PTI.

"We have got 8,000 MW in the pipeline, so this money will be needed for that. The investment (for this) is close to Rs 40,000 crore," JSW's managing director Sajjan Jindal said today but he did not specify the duration for this investment.

The company is implementing projects worth 3,200MW in Maharashtra, 1,320MW in Chhattisgarh and 1,600MW in West Bengal. It plans to become an over 11,000MW company by 2015.

The power producer today listed shares on the Bombay Stock Exchange (BSE) where it opened at a premium of 2% over the issue price of Rs100. On the National Stock Exchange (NSE), the share was listed at Rs106, a premium of 6%.

JSW Energy, which raised about Rs2,700 crore through an initial public offer held last month, will utilise the issue proceeds to fund expansion, repay debt and for general corporate purposes, Mr Jindal said.

"Part of the issue proceeds will be used for expansion into new projects, part will be used for repaying debt and part of the proceeds is for general corporate purposes," he told reporters after the company's listing ceremony in Mumbai.

JSW Energy, which has an installed capacity of 995MW, is also setting up an 860MW plant at Vijayanagar in Karnataka and a 130MW plant at Barmer in Rajasthan. The company has 2,790MW capacity of projects under construction and implementation stage.

It will commission about 2,100MW of units by December 2010, including the 1,200MW plant at Ratnagiri in Maharashtra, Mr Jindal said.

He added that 55% of the power generated by the company would be sold commercially or on merchant basis, while the remaining 45% would be sold through long-term power purchase agreements (PPAs).

"For the next three to four years, India is going to have acute shortage of electricity. Therefore, we are more tilted towards merchant power. Over time, as India develops more power plants, we will shift towards long-term PPA-backed sales," Mr Jindal said.

Meanwhile, JSW Energy is also exploring opportunities in the power distribution sector to diversify the company's business.

The company is presently engaged in generation, transmission and trading of electricity and is eyeing electricity distribution in the western region, as it has power plants in the region.

JSW Energy plans to evacuate power from its generating stations through its transmission lines and further distribute it.


More Gains Coming?

Sensex has closed at a weekly, monthly and quarterly high

During the past week, the market remained volatile as traders rolled over positions in the derivatives segment from December 2009 series to January 2010 series on expiry of the December 2009 contracts on Thursday (31st December). The Sensex ended the week 104 points higher. We expect the Indian bourses to continue with upward momentum next week.

On Tuesday, 29 December 2009, the BSE Sensex closed 41 points higher at 17,402 while the NSE Nifty closed at 5,188, up 10 points. During the day Reserve Bank of India (RBI) deputy governor Shyamala Gopinath said the focus of India’s monetary policy is shifting to managing recovery and containing inflation from one concentrated on fostering growth after the global downturn. She said rising food prices were fuelling concerns of broader price pressures and the policy challenge was to address the supply-side constraints. She added that effective assessment of the inflation process and using monetary policy actions at the right time would be critical.

Meanwhile, petroleum secretary RS Pandey said the government has no immediate plans to raise fuel prices after a recent media report suggested that auto-fuel prices could be increased anytime early next year.

Indian companies have reportedly lined up equity-raising plans of Rs1,50,000 crore in calendar 2010, which is close to two-and-a-half times what they raised through share sales in 2009. Earlier on Monday, prime minister Manmohan Singh said that the economy will grow at 7% or a little more in the current fiscal (2009-10).

Emerging-market equity fund inflows tripled last week as the outlook improved for developing-nation exporters, EPFR Global said on Monday. These funds attracted $1.7 billion in the week ended 23rd December, up from $571.4 million in the previous week. EPFR also said that this inflow added to a record $80.30 billion of investments in emerging-market stock funds so far this year, compared with outflows of $48 billion in the same period in 2008.

Asia ex-Japan equity funds also posted modest inflows of $179 million for the past week, with investors in this region rotating some exposure from smaller markets like Taiwan and Singapore to bigger ones such as China. China equity funds took in another $153 million, maintaining their record-setting pace, and dedicated BRIC equity funds also remain on track for a record-setting year after absorbing another $451 million.

India and Japan signed two important agreements on Monday for implementing the ambitious Rs3.6 lakh crore Delhi-Mumbai Industrial Corridor (DMIC) project which seeks to create integrated investment regions and industrial areas across six states. The agreements include collaborating in the development of eco cities that are environmentally and ecologically sustainable along the corridor, and setting up of a project development fund to undertake activities like master planning & feasibility studies, preparing project reports and obtaining approvals and bid process management for projects.

Japanese industrial production rose for the ninth straight month in November on increased output of cars for foreign customers, but the nation's retail sales continued to fall, signalling that Japan’s economic recovery remains fragile. As per the data released by the ministry of economy, trade and industry, the output at Japanese factories and mines gained by a seasonally adjusted 2.6% in November from October.

Meanwhile, Hong Kong’s exports rose for the first time in more than a year, helped by the global economic recovery. Exports rose 1.3% in November 2009 from a year earlier to HK$234.1 billion, the first increase since October 2008. Imports in November also increased 6.5% from a year earlier to HK$254.8 billion. According to the figures from MasterCard Advisors’ SpendingPulse, which track all forms of payment, retail sales rose 3.6% from 1 November 2009 to 24 December 2009, compared with a 2.3% drop a year ago.

On Wednesday, 30 December 2009, the Sensex declined 58 points from the previous day’s close, ending the day at 17,344 while the Nifty closed at 5,169, down 19 points. The Cabinet Committee on security has reportedly put on hold a new ground-handling policy in airports that was to be brought in from the New Year, as it feared job losses. It also decided to tweak the policy, which will now take effect from 2011, by allowing airlines to handle baggage within a terminal building. Under the new rules, airlines will handle cargo on the terminal side, but on the tarmac there will be only three ground-handling agencies. Meanwhile, Japan’s government set an economic growth target of more than 2% for the coming decade. South Korean manufacturers’ confidence rose for the first time in three months after the government raised its economic-growth forecast for Asia’s fourth-biggest economy.

An index measuring expectations for January climbed to 90 from 85 a month earlier, according to a survey of 1,488 manufacturers released by the Bank of Korea today in Seoul. A measure of non-manufacturing companies’ expectations was unchanged at 84 for the third straight month.

As per US reports, consumer confidence rose to a three-month high in December, while prices in the hard-hit housing sector stalled in October, breaking a five-month string of gains. The Conference Board, an industry group, said its index of consumer attitudes rose to a reading of 52.9 in December from a revised 50.6 in November, as job-market pessimism eased and consumers' expectations reached a two-year high.

In housing, the S&P composite index of home prices in 20 metropolitan areas was flat in October, falling short of expectations for a 0.2% rise. September’s index was revised upward to a gain of 0.4%, from a previously reported 0.3%.

According to S&P, only seven of the 20 cities in the composite index had month-over-month gains in prices in October.

On Thursday, 31 December 2009, the Sensex was up 121 points from the previous day’s close, ending the day at 17,465 while the Nifty closed at 5,201, up 32 points. The markets pared gains towards the end of the day as the near-month December 2009 futures & options (F&O) contracts expired.

The government announced that the food price index rose 19.83% in the 12 months to 19 December 2009. The primary articles index jumped 15.49% and the fuel price index rose 4.45%. The worst monsoon in nearly four decades and flooding in some parts of the country have pushed up food prices.

As per media reports, the government is expected to sell shares in 17 to 18 State-owned firms in each of the next two fiscal years, with an issue happening every two to three weeks. The report also said that the ministry of disinvestment was consulting with administrative ministries of more than 50 State-owned firms to assess the preparedness for public offer.

Meanwhile, in the report submitted to Pratibha Patil, president of India, the 13th Finance Commission has suggested the path of fiscal consolidation and sharing of tax revenues between the Centre and the States. The report has assessed the impact of the proposed goods and services tax (GST) on trade. It has also suggested steps to deal with the growing off-budgetary expenditure, especially, oil bonds, the implications of environment and climate change, and ways to improve outcomes and outputs of public expenditure. The RBI commented that credit growth will rise to 17%-18% when gross domestic product (GDP) growth reaches 8%-9%.

As per US media reports, the Chicago purchasing manager's index jumped to 60 in December 2009 from 56.1 in November 2009, the highest since January 2006 and well above expectations. The employment gauge also rose, hitting its highest level since November 2007.

The market remained closed on Friday (1st January) for the New Year holiday. From Monday, 4 January 2010, trading will start at 9:00 IST and end at 15:30 IST, as against the current timing of 9:55 IST to 15:30 IST.


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