JSWEL Corporate Investor Presentation February 2023
JSWEL Corporate Investor Presentation February 2023
JSWEL Corporate Investor Presentation February 2023
Corporate Presentation
February 2023
Forward Looking and Cautionary Statement
This presentation has been prepared by JSW Energy Limited (the “Company”) based upon information available in the public domain solely for information purposes without regard
to any specific objectives, financial situations or informational needs of any particular person. This presentation should not be construed as legal, tax, investment or other advice.
This presentation is strictly confidential, being given solely for your information and for your use, and may not be copied, distributed or disseminated, directly or indirectly, in any
manner. Furthermore, no person is authorized to give any information or make any representation which is not contained in, or is inconsistent with, this presentation. Any such
extraneous or inconsistent information or representation, if given or made, should not be relied upon as having been authorized by or on behalf of the Company.
This presentation contains statements that constitute forward-looking statements. These statements include descriptions regarding the intent, belief or current expectations of the
Company or its directors and officers with respect to the results of operations and financial condition of the Company. These statements can be recognized by the use of words
such as “expects,” “plans,” “will,” “estimates,” “projects,” or other words of similar meaning. Such forward-looking statements are not guarantees of future performance and
involve risks and uncertainties, and actual results may differ from those specified in such forward-looking statements as a result of various factors and assumptions. The risks and
uncertainties relating to these statements include, but are not limited to, (i) fluctuations in earnings, (ii) the Company’s ability to manage growth, (iii) competition, (iv) government
policies and regulations, and (v) political, economic, legal and social conditions in India. The Company does not undertake any obligation to revise or update any forward-looking
statement that may be made from time to time by or on behalf of the Company. Given these risks, uncertainties and other factors, viewers of this presentation are cautioned not to
place undue reliance on these forward-looking statements.
The information contained in this presentation is only current as of its date and has not been independently verified. The Company may alter, modify or otherwise change in any
manner the contents of this presentation, without obligation to notify any person of such revision or changes. No representation, warranty, guarantee or undertaking, express or
implied, is or will be made as to, and no reliance should be placed on, the accuracy, completeness, correctness or fairness of the information, estimates, projections and opinions
contained in this presentation. None of the Company or any of its affiliates, advisers or representatives accept any liability whatsoever for any loss howsoever arising from any
information presented or contained in this presentation. Please note that the past performance of the Company is not, and should not be considered as, indicative of future results.
Potential investors must make their own assessment of the relevance, accuracy and adequacy of the information contained in this presentation and must make such independent
investigation as they may consider necessary or appropriate for such purpose. Such information and opinions are in all events not current after the date of this presentation.
The Potential investors shall be in compliance with the applicable Insider Trading Regulations, with respect to the Company in reference to the information provided under this
presentation.
2
JSW Energy Steel
Power producer with 9.9 GW locked-in portfolio, India’s leading integrated steel producer
Targeting 20GW by 2030 (81% renewable capacity) Installed crude steel capacity of 29.2mtpa, growing to 38.5mtpa
Market Cap: ~US$ 4.6 Bn Market Cap: ~US$ 21.4 Bn
Infrastructure Cement
JSW Group
Amongst Top 5 Indian port companies India's leading Green cement company
Overview Operates environment-friendly seaports & terminals Current capacity of 17mtpa, with a medium term target of 25mtpa
Targeting 200mtpa cargo handling capacity in next few years Product range includes PSC, GGBS, Concrete & Construction
Chemicals
Paints Ventures
India's new age Paints company offering a path-breaking Any
Colour at One Price Early-stage, tech-focused, VC fund
Amongst India’s leading Portfolio: Purple, LimeTray, Homelane, CureSkin and Zvlov
State-of-the-art Facilities in Maharashtra and Karnataka
Conglomerates with a Ranks Number 1 in Industrial Coil Coatings
turnover of US$22 Bn
Sports Foundation
Electrons to Molecules
Foraying into products and services through energy storage solutions, green hydrogen and its derivatives
Baspa Hydro Power Plant
5
Agenda
Sustainability
Asset Overview
Risk Mitigation
Annexures
Vijayanagar
Acquisition of Renewable Portfolio of 225MW Solar Power Plant
Mytrah Energy 6
JSW Energy –Company Overview
At a Glance
The company is well placed to achieve its capacity growth target of 10 GW much ahead of the stated timeline
of FY25 and being future-ready with increased share of renewables and new energy solutions.
Steady operations and robust financial: Track record of strong yearly cash profits of FY20 FY21 FY22 9M FY23 FY20 FY21 FY22 9M FY23
~₹2,300 Crores.
High LT PPA tie-up rendering high cash flow visibility EBITDA & EBITDA Margin (₹ Crore) Cash PAT2 (₹ Crore) and Return on Adj.Net Worth
– Almost all LT PPA under two-part tariff (imported/domestic fuel cost/forex pass
through) 4,138 2,395
– Remaining Avg. Life of PPA: ~19 years 3,244 2,936 2,099 1,947 1,983
3,144
– Remaining Avg. Life of Assets: ~28 years
Diversified off-takers 44% 47%
38% 36%
– All plants placed favorably in Merit Order Despatch
19% 17% 19% 21%
– Hydro projects under ‘must-run’ status
– Consolidated Trade receivables at ₹ 1,628 Cr equaling to 69 receivable days as on FY20 FY21 FY22 9M FY23 FY20 FY21 FY22 9M FY23
Dec 31, 2022
LT : Long Term, ₹1 Crore = 10Mn; 1 - As on Dec 31, 2022 ; 2- Calculated as PAT+ Depreciation+ Deferred Taxes+ Exceptional items ( on TTM basis as on Dec 31, 2022); 3-Not comparable YoY in FY21 due to Change to Job Work Model Partially 8
Robust balance sheet to support renewable-led growth
Large balance sheet headroom & strong cashflow available to pursue growth
2.30x 0.54x $ Bn 4
Net Worth Net Debt
Net Debt/EBITDA Net Debt/Equity
2.5 2.3 2.2
2.0
2.0 1.7
1.5
8.29% 69 1.5
1.5
1.2 1.2
Wt. average cost of debt Receivable Days 1.0 0.8 0.9
0.5
Figures as of Dec 31, 2022
0.0
Mar'19 Mar'20 Mar'21 Mar'22 Dec'22
Strong Liquidity with healthy cash balances: ₹ 3,029 Crore ($ 366 Mn3)
Weighted average cost of debt is 8.29% as of Dec 31, 2022 ND/EBITDA for Operational Projects at 1.5x (Dec-22) 5
1 Value of JSW Steel Share holdings as on Dec 31, 2022. Net Worth is impacted by change in value of listed equity investments through Other Comprehensive Income,
2. Calculated as FCFE Yield on Adj. NW is ~14%; Adj NW : Net worth adjusted for non-strategic equity investments held
3. 1 USD =82.7 INR
4 Conversion based on USD = INR spot rate as of respective date
5. Based on net debt for operational projects of ₹3,365 crores; total net debt at the group level stands at ₹9,840 crores on Dec-22. 9
Sustainability at JSW Energy
Continuing our Health & Safety Excellence Journey
Awards &
Zero severe injuries/fatalities (Q3 FY23 & YTD) Recognitions
92% of contractors covered by JSW CARES audit
9 Contractors achieve 5 Star rating & 3 contractors achieve 4 Star in a stringent Internal Safety
Assessment
11
Sustainability: Framework and Policies
17 Focus Areas with 2030 Targets from 2020 as Base Year Governance & Oversight by
Sustainability Committee
Climate Change: Renewable Power: Biodiversity:
Committed to being carbon Enhance the renewable power to No Net Loss for Biodiversity Mr. Sunil Goyal
Independent
neutral by 2050 2/3rd of our Total Installed
Capacity 2 Directors
Ms. Rupa Devi Singh
Reduce our carbon emissions by
more than 50%
Zero Liquid Discharge 100% Ash (Waste) utilization Reduce our water consumption
per unit of energy produced by
50%
ESG Ratings – best amongst peers
MSCI : BB
Specific process
emissions(Kg/MWh) Ensuring ESP (Electrostatic Precipitator) Fields availability
Air Emissions PM 0.16 0.053 67% Optimising Lime dozing system efficiency
SOx 1.78 0.683 61%
Process efficiency improvements
NOx 1.01 0.373 63%
Continue to enhance Biodiversity at all our locations and operations to acheive ‘no net loss’
- Achieve
Biodiversity at our ‘no net loss’ Increase green cover across operations
Biodiversity
operating sites of biodiversity Eco-system studies (all seasons) in progress for finalising a Bio-diversity management plan at
Barmer location.
13
Sustainability: Q3 FY23 Performance
Key Highlights Performance
14
Advantage JSW: Superior ESG Profile
Board & Governance Air Emissions Water & Waste Management
ESG Ratings
% Nomination & Remuneration Committee Specific SOx Emissions(Kg/MWh)
Independent
4.13 4.50
100 100 80 75 71 67 67 3.00
JSW Energy A- JSW Energy BB
1.52 Peer 6 C Peer 6 A
JSW Peer 1 Peer 4 Peer 6 Peer 5 Peer 2 Peer 3 0.01 Peer 1 B Peer 1 BBB
Energy Peer 3 B Peer 3 CCC
Peer 2 JSW Energy Peer 1 Peer 3 Peer 4
Peer 4 D Peer 4 CCC
Peer 2 F
Peer 5 F
Peers include: Adani Green, Adani Power, CESC, NTPC, Tata Power, Torrent Power Source: Company Annual Reports, Maybank Kim Research; Data as of FY22, as per available public disclosures 15
Sustainability: Initiatives and Disclosures
Task Force on Climate related Sustainability Assessment for Supply Chain and Plantation drives spanning across Vijayanagar,
Financial Disclosures Biodoversity Assessment for all plants Initiated Barmer & Hydro Power Plants
Comprehensive ESG Data profile with ~300 factors across 15 sustainability frameworks JSW Energy JSW Hydro Energy
Click on the above links or scan the QR code to find out more about our initiatives 16
Sustainability: Empowering Our Communities
Health & Nutrition Water & Waste Agri-livelihoods Education Women’s BPO & Skill Enhancement Art, Culture & Sports
Environment Management Livelihoods Heritage
Click on the links above to find out more about our initiatives 17
Strong Board Oversight and Leadership
Mr. Prashant Jain Mr. Pritesh Vinay • Majority Independent Board: 5/9
Mr. Sajjan Jindal
Chairman & Managing
Joint Managing Director Director (Finance) Directors are Independent
& CEO
Director • Fully Independent Audit and
Remuneration Committees
Audit Committee
Mr. Parth Jindal Mr. Sunil Goyal
Ms. Rupa Devi Singh
Non-Executive, Non- Compensation & nomination & remuneration Committee
Independent Director Independent Director
Independent Director
Risk management Committee
1,331
1,391
4,811 9,896 3,158
422 36.6% Under- 29.4%
3,158 construction
Wind
1,757
700
Ind-Barath
Pipeline 4.3%
17.8%
Group Captive 28% Group Captive 21%
Hydro
Hydro Thermal Wind Solar
Under-
acquisition 17.7%
Total locked-in capacity (9,896) MW 6.6%
Renewable constitutes 61% of total locked-in capacity
Solar
Locked In 9.9 GW Installed Capacity 4.8 GW Under construction & Pipeline 3.3 GW Under Acquisition 1.8 GW 22
Installed Portfolio – 4.8 GW
Barmer: 1,080MW 4.8 GW installed Baspa II: 300MW & Karcham Wangtoo: 1,091MW 4
Configuration: 8 X 135MW 34% Renewable Configuration: 3x100MW (Baspa II) ; 4x272.75MW (Karcham)
Units operating: since 20093 66% Thermal Units operating: Baspa II since 20033 and Karcham Wangtoo since
Technology: Sub-critical pithead Lignite based TPP 20113
Fuel Source: Captive Lignite mines of BLMCL1 Technology & Fuel Source: Hydro
Power Offtake: Long Term PPA : 100% Power Offtake: Long Term(1300MW), Short Term(45MW)
Project Cost: INR 7,165 Crore/ $866mn2 Asset Value to JSW Energy: INR 9,275 Crore/$1,121mn2
SECI X Wind : 27 MW
Nandyal: 18 MW
Configuration: 450 MW (Part commissioning of 27 MW)
• 1x18MW Thermal Power Plant
Power Offtake: PPA with SECI
• 100% LT PPA under Group Captive scheme
Locked In 9.9 GW Installed Capacity 4.8 GW Under construction & Pipeline 3.3 GW Under Acquisition 1.8 GW 23
3.3 GW Projects - Under construction | Pipeline | Acquired
0.7 8.1
0.3 0.1
0.7
0.8 0.2
0.4
4.8
Installed
Kutehr HEP
Installed +
SECI - X
SECI- IX
Chhatru HEP
(Acquired)
Total locked
Mytrah RE
Capacity
Ind Barath
Captive
SECI- XII
Pipeline
Group
Assets
U/C +
in
2.2 GW of Renewable Projects Under Construction | 700 MW of Thermal (acquired) | 426 MW Projects in Pipeline*
*LoA/LoI received
Locked In 9.9 GW Installed Capacity 4.8 GW Under construction & Pipeline 3.3 GW Under Acquisition 1.8 GW 24
Under Construction Projects – 2.2 GW
Under Construction Portfolio
Capacity Scheduled Target
Plant Segment Location PPA/Offtaker
(MW) Commissioning Commissioning
SECI - IX 810 Wind Tamil Nadu 25-Year; SECI Dec-23 progressively from
SECI - X 450 Wind Tamil Nadu 25-Year; SECI Jun-23 Q3 FY23
Karnataka,
Group Captive Maharashtra progressively from
733 Wind 25-Year; JSW Steel NA
– JSW Steel & Tamil Q1 FY24
Nadu
* Excludes 27MW of SECI X Wind project for which part-CoD has been received
Locked In 9.9 GW Installed Capacity 4.8 GW Under construction & Pipeline 3.3 GW Under Acquisition 1.8 GW 25
Update on Under Construction Projects (1/2)
SECI-IX & X Wind, Tamil Nadu (1,260 MW)
Locked In 9.9 GW Installed Capacity 4.8 GW Under construction & Pipeline 3.3 GW Under Acquisition 1.8 GW 26
Update on Under Construction Projects (2/2)
Kutehr HEP, Himachal Pradesh (240MW)
Completed ~90% (19.0 km) tunneling work (up from ~84% in Q2) well ahead of timelines
Downstream Left Half Barrage DC Chamber lining in progress HRT concrete lining
Locked In 9.9 GW Installed Capacity 4.8 GW Under construction & Pipeline 3.3 GW Under Acquisition 1.8 GW 27
Pipeline Projects
Generation Storage Systems
426 MW Pipeline Projects Battery Energy Storage System
Locked In 9.9 GW Installed Capacity 4.8 GW Under construction & Pipeline 3.3 GW Under Acquisition 1.8 GW 28
Acquired - Ind-Barath 700 MW
Ind-Barath: Asset Overview
Acquisition Rationale
Locked In 9.9 GW Installed Capacity 4.8 GW Under construction & Pipeline 3.3 GW Under Acquisition 1.8 GW 29
Mytrah Acquisition at Advance Stage
Locked In 9.9 GW Installed Capacity 4.8 GW Under construction & Pipeline 3.3 GW Under Acquisition 1.8 GW 30
Why JSW Energy ?
Committed to reaching
Net Zero emissions by 2050
Compelling Investment Story
1
At the forefront of Energy Transition
Scaling to 20 GW (81% renewable) by 2030
Being future-ready : New Energy Solutions
including energy storage, green hydrogen,
Sustainable growth ammonia and its derivatives
32
Compelling Investment Story
1
At the forefront of Energy Transition
Scaling to 20 GW (81% renewable) by 2030
Being future-ready : New Energy Solutions
including energy storage, green hydrogen,
Sustainable growth ammonia and its derivatives
33
Scaling to 20 GW by 2030
JSW Energy Ltd Ahead of FY25 capacity target
20.0
4x Well ahead of near term target of 10 GW capacity by FY25…
…While foraying into Energy Storage projects (BESS & PSP)
10.0
10x
Sufficient Internal Accruals
FY 22 Actual FY 32 Estimated
FY02 (Actual) FY22 (Actual)
2290 335
1380 202 + 910 BU
+ 133 GW
523 78
Base Demand (in BU) Peak Demand (in GW) Base Demand (in BU) Peak Power Demand (in GW)
Demand to be met incrementally with Renewable Energy Rapid Urbanization and universal electrification to drive power demand
FY 22 FY 32 487
India’s is world’s third largest power producer, however has a
This 377 GW increase
333 low per capita consumption (~1/3rd of world average), this
translates1 to 990 BU,
provides huge opportunity for growth
which is inline with
134 base demand growth
110 Sustained economic growth has driven power demand in India,
54 of 910 BU
40 going forward, unlocking of demand from increased rural
electrification and rapid urbanization to drive demand for
Solar Wind Total Renewable Capacity power
Share of Renewables is projected to increase from 27% in FY 22 to 57% in FY 32 Factors key for growth of renewables
FY 22 FY 32
Capital Adequacy
59% 32%
• Availability of debt at lower interest rates
8%
2% 3% Policy Support
399 GW 847 GW
16% • Tariff related support for renewables
12%
4%
2% • PLI for Solar PV modules
10% 13%
39%
Shift from Thermal
300
• We intend to be future ready by foraying into
Peak Supply - Conventional
250
Energy Storage Solutions (ESS)
200
Peak Demand Increasing Peak Demand-Supply Gap to be plugged Hydro Pumped Storage (PSP)
150 by RE + Storage
100
Battery Energy Storage System (BESS)
FY 18 FY19 FY 20 FY 21 FY 22 FY 23e FY 24e FY 25e FY 26e FY 27e FY 28e FY 29e FY 30e FY 31e FY 32e
Renewable Energy + Storage Solutions required to plug increasing Peak Demand-Supply Gap going forward Electrons to Molecules
Peak Power Demand is expected to grow at a CAGR of ~5% between FY22-32
Hence, Increasing gap between Peak Demand and Peak Supply from conventional power sources
Green Hydrogen /Ammonia
(Thermal+Nuclear+Hydro) will be needed to be plugged by supply from renewable + storage capacities
52GW/258GWh1 installed capacity by 2032 LoAs received for SECI bid for the utility scale pilot BESS
project (500MW/1000MWh)
• Facilitate RE capacity integration by addressing
intermittency • Capacity charge of ₹10.85 Lakh per MW per month
• Balancing grid against load fluctuations • Pilot project is Build Own Operate Transfer (BOOT)
• Better utilization of transmission infrastructure with tenure of 12 years
• Project will have Battery Storage Purchase
Agreement for 60% of the capacity with SECI and
balance is open for sale
Supporting India’s Clean Energy commitments • Identified site is at Fatehgarh, Rajasthan
• Waiver of ISTS charges allowed for BESS • Participate in ancillary market with the open
• Integral to RTC power infrastructure for clean energy capacity
Electrolysis using
Steam Methane Reforming (SMR) SMR + CCS
renewables
Intense Low Low High Zero High
Coal Gasification Coal Gasification + CCS
CO2 Cost CO2 Cost CO2 Cost
Source: Press information Bureau – India, Company Market Research, Hydrogen Policy Study by ASSOCHAM. 40
Electrons to Molecules: Green Hydrogen
Significant H2 demand
H2 • India - 2nd largest hydrogen demand base in the world
To tap significant clean energy market opportunity in India
and become a front-runner in a future hydrogen economy
• H2 demand expected to grow to ~24 MMT by 2050; can spur Utilisation potential across:
USD 65-70 Bn investments in incremental RE capacity
• green steel making
National Hydrogen Mission • green ammonia
• Announced in the Union Budget 2021 for making a • chemical derivatives
hydrogen roadmap for the country
• hydrogen mobility
• Government announced Green hydrogen obligation for
Fertilizers and Refinery sector • other industrial applications
• Incentives of ₹19,744 crores announced for development of
green hydrogen capacity of at least 5 MMT/annum
Source: Press information Bureau – India, Company Market Research, Hydrogen Policy Study by ASSOCHAM. 41
Compelling Investment Story
42
Proven project execution and operational excellence…
Prudent and consistent capital allocation strategy for
growth over a 25 year history
7.9
Sound operating efficiency characterized by one of the 7.0
6.3 6.2 6.2
lowest O&M Cost/MW 5.2 5.2
4.7 4.6 4.3
1.0
0.8 3.3
0.8 0.7 0.7
O&M Expenses (Rs Mn/MW) 0.6 0.6 0.6 0.6 0.5
0.4
Chandrapur
Amarkantak
JSW : Ratnagiri2
Padampur
(1200)
(600 MW)
Jangiri-Champa
JSW : Vijaynagar
JSW : Vijaynagar
(1320 MW)
(1050 MW)
(540 MW)
Udupi
(600 MW)
(600 MW)
Warora
Maithon
1.6
(1200 MW)
(1200 MW)
Nigre
(260 MW)
(600 MW)
1st COD year $Mn/MW Rs. Crore/MW
1 Crore= 10Mn; 1- USD/ INR = 82.7 2- Includes FGD Cost Source: Respective Company filings 43
Compelling Investment Story
44
Steady Operations and Robust Financials
Consistent Asset Performance Low Trade Receivables 2
FY20 FY21 FY22 9M FY23 FY20 FY21 FY22 9M FY23 Receivable Days 75 69
EBITDA & EBITDA Margin (₹ Crore) Cash PAT (₹ Crore) and Return on Adj.Net Worth
4,138 2,395 All plants placed favourably in States’ Merit Order Dispatch
3,244 2,936 2,099 1,947 1,983
3,144 o Further, Hydro plants under ‘Must-run status’ with no scheduling risk
No history of any bad debts from routine long term trade receivables
47% Payment security mechanism in force for power tied under long term PPA
38% 44%
36% with discoms
19% 19% 21% Recovery of late payment surcharge in case of delayed payments from
17%
discoms
FY20 FY21 FY22 9M FY23 FY20 FY21 FY22 9M FY23
1.Not comparable YoY in FY21 due to Change to Job Work Model Partially 2. Includes Unbilled Revenue 45
Best-in class balance sheet & cash flows to support renewable-led growth
Large balance sheet headroom to pursue growth opportunities Healthy internal accruals to support growth
1. Applying the average return of 18% on current adjusted net worth 2. Includes unencumbered bank balances, FDs, and liquid mutual funds 46
Risk Mitigation
Adequately addressing key risks and concerns (1/2)
Key Risks/Concerns Favourable Policy Support and Market Interventions Mitigation Strategy by JSW Energy
Well established central agencies (SECI, NTPC) for managing PPAs Existing portfolio: 85 % PPA signed which forms about 95% of
Discoms/offtakers entering into new renewable long-term PPAs at EBITDA
Demand risk (Clearing of commercially attractive tariff given pick-up in economic activity resulting in U/C portfolio: PPA signed for all renewable projects
PPA Backlogs) strong spot electricity prices Mix of Discoms and C&I customer base
Renewable Power Obligation for RE and Hydro Projects, energy storage Targeting new areas of demand through Green Hydrogen and
obligations also introduced thereby promoting energy storage projects Energy storage
Domestic industry for ~$2.9 bn production linked incentive scheme for high efficiency PV modules Technology agnostic approach
capacity addition ~$2.2 bn scheme for ACC batteries To benefit from domestic capacity addition
48
Adequately addressing key risks and concerns (2/2)
Key Risks/Concerns Favourable Policy Support and Market Interventions Mitigation Strategy by JSW Energy
49
JSW Energy : Key Highlights
Superior project execution skills: Projects set-up in lowest cost & time
Proven Execution
Differentiated business strategy for growth to 20 GW, driven by Renewable
Excellence
Foraying in New Energy Platforms: Green Hydrogen, Energy Storage, Energy Products & Services
Strong Focus on ESG – Leadership band with ‘A-‘ score in the 2021 CDP Climate Change assessment
Focus on
Amongst the Highest rated power generation company in India by various independent ESG rating agencies
Sustainability
To be Carbon Neutral by 2050; Committed to set science based emission reduction targets (SBTi)
Sound operating efficiency characterized by one of the lowest O&M costs in the sector
Efficient O&M Global best practices & recognition in Safety: Barmer and Ratnagiri Plants awarded ‘SWORD OF HONOUR’ by British Safety
Council
Steady EBITDA and 85% of total portfolio tied up with LT PPA providing ~95% EBITDA and Cashflow generation
Cash accruals Two-part tariff structure mitigating fuel and forex risk
Amongst the Strongest Balance Sheet in the sector: 2.30x Net Debt/EBITDA; 0.54x Net Debt/Equity
Strong Balance Sheet Healthy debt metrics to be maintained while pursuing value accretive growth
A healthy cash balance of ₹3,029 Cr and financial flexibility with JSW Steel equity shareholding
50
Investor Relations Contact:
[email protected]
All subsidiaries shown are WOS except the following - * JPTL is a 74:26 JV between JSWEL and Maharashtra State Electricity Transmission Company Limited (MSETCL) # BLMCL is a 51:49 JV between Rajasthan State Mines and Minerals Limited
(RSMML) and JSWE(B)L ^ JSW Future Energy Limited will be merged with JSW Neo Energy Limited under the scheme of Amalgamation wherein all the assets and liabilities of JSW Future Energy Limited will be transferred to JSW Neo Energy Limited.
Approved by NCLT subject to certain customary approvals. 53
JSW Neo Energy – Green Energy Vehicle of JSW Energy (Post-Restructuring)
Hydro Entities
JSW Energy Limited
Solar/Wind Entities
Prudent selection of growth opportunities Life cycle approach Group’s project execution excellence
• Bidding based on P90 generation assumption • Land acquisition, De- scoped project • Fast execution while ensuring all safety
• Conservative Interest rate assumptions construction, power evacuation and O&M guidelines
• Targeted selection- Targeting a niche segment of market
offering healthy returns – Mid teen IRRs • Power evacuation
• Proactive approach to get the PPA/PSA
executed and tariff adoption
55
Growth Framework leading to industry-leading returns
Single digit to lower Mid-teen High-teen
teen IRR% IRR % Returns Realized
Current market returns Bidding with No Turn key EPC Targeting mid-teen Cost reductions due Enhancement
due to highly conservative contracts: instead post-tax equity IRRs to Self O&M In Returns Realized
competitive tariffs1
assumptions creating value with split Technology
Targeting a niche package approach Improvement
market segment Modular Reducing Interest
offering healthy returns commissioning; Early cost via refinancing
Pre-bid resources onset of revenues
identification to reduce Debt loading coinciding
uncertainty on land & with revenue
connectivity generation
1- Company market analysis; COD: Commercial operations date; IRR: Internal Rate of Return 56
1
Value Accretive Business Model
High quality offtakers - SECI and Captive PPAs with JSW Group companies (strong credit ratings) at arm’s length pricing
Modular nature of commissioning of projects; potential for early onset of revenues and earnings
Bidding with prudent assumptions and approach backed by strong data backup
Bidding based on P90 generation assumption
Reasonable Interest rate assumptions
Targeting mid-teen IRRs
57
2
Implementation De-risking
JSW approach:
58
2
Life-cycle Approach towards Renewable (1/2)
59
2
Life-cycle Approach towards Renewable (2/2)
Quality
Supplier & Vendors O&M
Control
• Robust selection process • Dedicated team for quality • Skilled in-house O&M team
through competitive route; assurance
Award of packages to best-in- • Continuous implementation of
class / Tier-I vendors only • Standard operating procedure innovative practices to further
for quality checks optimize O&M cost through TQM
• Comprehensive Contracts with
strong performance & product • Special checks on quality & type • Operating Stations supported by
warranty and performance bank test certifications experienced professionals at
guarantee provisions corporate office in areas such as
• Implementation of TQM, ISO and Policy, Regulatory, Design &
• Developing strong relationships other relevant standards Engineering, Finance, Construction
with all major OEMs, EPC
& Maintenance and HR
contractors, BoP contractors
60
3
Execution Efficiency
• Received part-CoD for 27MW of SECI X wind project in a progressive • 90% tunnelling (19.0 km) tunnelling work completed at the end of Q3FY23
commissioning • Expected to be completed by Sept 24 well ahead of scheduled timeline
61
JSW Energy’s Corporate Journey
260 MW 260 MW 260 MW 995 MW
1994 2000 2002 2007 2009
• JSW Energy acquired 1,391 MW • Commercial operation of Unit -3&4 • IPO of JSW Energy at Rs 100/share
• Commercial operation of entire
of Himachal Baspa Power of 300 MW each at Ratnagiri plant • Commercial operation of Unit 1&2 of
8*135 MW Power plant of JSW
company (now JSW Hydro and Unit -3 & 4 of 135 MW each at 300 MW each at Ratnagiri and Unit 2
Energy (Barmer Ltd)
Energy Ltd) from JPVL Barmer plant of 135 MW at Barmer
• Commissioned Vijaynagar solar power plant of • LOAs for SECI Bid for 500MW
• Highest ever single bid capacity of 810 • Company announced transition
225 MW & part commissioning of 27MW SECI X BESS bid
MW standalone wind awarded under towards ‘Green’ business
• Raised $707 Million via green bonds • 1.75GW Mytrah RE assets acquisition announced
SECI IX tranche
• Completed 700 MW Ind- Barath TEP acquisition
Quarter ended Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22
Reported PAT 107 201 339 324 864 560 466 180
Add: Depreciation 294 288 284 281 277 289 294 295
Cash PAT 346 510 610 631 643 813 681 489
Cash PAT (TTM) 1,947 1,940 1,899 2,097 2,395 2,697 2,767 2,625
Adjusted Net Worth** 11,473 11,529 11,475 11,830 12,688 12,952 13,491 13,446
Cash Returns on Net Worth (%) 17% 17% 17% 18% 19% 21% 21% 20%
Strong cash returns of >18% translates to yearly cash profits of ~₹2,300 crores
*Refer note 4 of Q4FY21 release and note 5 of Q4FY22 release for Mar-21 and Mar-22 one-offs, respectively. Jun-22: Exceptional items ₹ 120 crore represents reversal of loss allowance made in earlier years on loan given to a party.
** Adjustment in net worth by excluding the value of shares of JSW Steel 63