I am very bullish on SJVN, reason being:

1. They are mostly into renewables now… one of their major Thermal plant is Buxar. Apart from this, I dont think they have any major Thermal.

2. When I researched on SJVN in June 2023, they had installed capacity of about 2000 MW and had visible pipeline of 7000 MW capacity (image attached for my analysis until June 2023). At that point of time, they had vision to 20x their installed capacity by 2030 or so.

   

3. In last 6-8 months, they have got orders of atleast 4000 – 5000 MW, so now projections are at 12000 MW operational capacity by 2026-27.

4. They aim to increase their installed Capacity to 25 MW by 2030. Which will be more than 12x of their current capacity

5. SJVN has been designated as Renewal Energy Implementation Agency by Government of India. Through REIA SJVN collects the demand from the states / discoms and then for the renewal
   energy, they invite bids from the developers. These developers build RE project, then the
   PPOs are signed between these developers and the discoms of the states. And the SJVN will
   get INR0.07 paisa per unit for this energy which we would be supplied to these discoms. There are 4 REIA in India at the moment.

All this growth will certainly bring in risks along:

1. Some project size are way too small, so too many projects to manage – Current capacity if 2000 MW with 5-6 projects. 6x increase in capacity is being achieved with about 50 projects.
2. Financial viability of small projects – small projects may be low margin
3. Huge capex needed for power projects would mean a very high debt and Interest payout, which may erode some profit margins.

What I am expected – With 12x capacity, revenues are expected to be 10-12x and Net Profits may increase 6-7x due to interest outgo in initial years + REIA opportunity would also bring in 2-2.5K profits over 4-6 years. REIA is a new thing for SJVN, not sure how it will play out.

My average buying price is 66, I am expecting a min of 6x from my invested price by 2030

Median PE for 3 or 5 years?

Good insights, thanks. ICRA CRISIL & CARE all ratings are needed. Anyways there is no way this PSU can get less than AA rating.

Also it is good to see contrasting viewpoints from @akash_das and @Anubhav_Garg based on the same fact, this is why I started this thread on VP.

Skipper has allotted Rights Issue 1:10 ie one Rights Equity for every 10 shares held.

Today that REs have been credited to eligible share holders. RE issue will be at 198/-share. Hence there is a difference of Rs 42/- from todays CMP of skipper. Those who are not interested to apply for RE, have sold their share in open market and are available at Rs 42/-. (ie the difference between Offer price and CMP of skipper).

Those who want apply for Rights Issue, to apply on or before 05 Feb by paying Rs 48.25. you will be issued with Skipper BE share of face Value 0.25 (present FV of skipper share is Rs 1). You may need to pay additional Rs 144.75 as and when asked by the board to convert that share to a normal skipper share of FV of 1 (Up to three additional Calls, with terms and conditions such as the number of Calls and the timing and quantum of each Call as may be decided by the Board/ Rights Issue Committee –from time to time to be completed on or prior to March 2025).

From 05 Feb, REs allotted will expire and wont be avl for trading.

Earnings Outlook With Varun Lohchab, Head of Institutional Research, HDFC Securities

Some discussion around battery companies.

Calls it a day in politics and will start to focus on Amara raja as per news