The shares of JSW Energy Limited rallied 7.70% to a session high of ₹674 on Monday as the company signed an agreement with O2 Power for its acquisition at $1.47 billion.
The agreement was signed between O2 Power and JSW Neo for the acquisition of 4,696 MW or renewable energy (RE) platform. The acquisition includes the purchase of O2 Power Midco Holdings Pte Limited and O2 Energy SG Pte Limited, which had been jointly establishedby EQT Infrastructure and Temasek.
Sharad Mahendra, joint managing director and CEO of JSW Energy said, “We are thrilled to announce the acquisition of O2 Power’s 4.7 GW renewable energy platform which is JSW Energy’s largest acquisition since inception. This landmark acquisition strengthens our positioning as a leading player in India’s energy sector. These high quality assets strengthen our operational footprint across key resource-rich states. It gives me great joy to welcome the experienced management team and employees of O2 power to the JSW Energy family. By combining our strengths, I am confident that we will deliver exceptional value to our stakeholders.”
The transaction will go through only after receiving an approval from the Competition Commission of India (CCI) as well as other regulatory clearances. It will enhance JSW Energy’s generation capacity to 24,708 MW from the current 20,012 MW. This locked-in capacity is inclusive of a mix of installed assets and projects at various stages of development.
O2 Power’s projected capacity to be operational by June 2025 is 2,259 MW. The platform currently has 1,463 MW capacity under construction with 974 MW capacity in pipeline, with all projects slated for completion by June 2027. These assets are spread across seven Indian states and showcase a blended average tariff of ₹3,37 per kWh and a remaining operational life of approximately 23 years.
The acquisition requires further capital expenditure amounting to ₹13,000-14,000 crores to expand the platform’s full capacity to 4.6 GW in the near future.
The commercial and industrial (C&I) component of O2 Power’s portfolio, presently at 596 MW, will significantly increase JSW Energy’s C&I capacity to 3,694 MW post-acquisition. Currently, JSW Energy has an installed capacity of 7,740 MW as of September 2024.
The transaction advisor is PWC, with legal counsel provided by Khaitan & Co and Herbert Smith. The financial and tax due diligence was conducted by KPMG, while Wind Guard oversaw technical assessments.
At close on Monday, the shares of JSW Energy Limited saw gains of 2.83% to ₹643.50 per share as compared to the previous close of ₹625.80 per share on the National Stock Exchange (NSE).
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