JSW Energy Secures NCLT Approval for ₹15,990 Crore KSK Mahanadi Acquisition.

JSW Energy has received approval from the National Company Law Tribunal (NCLT) for its ₹15,990 crore acquisition of KSK Mahanadi Power Company (KMPCL), a 3,600 MW coal-fired plant in Chhattisgarh. The deal, which is still awaiting clearance from the Competition Commission of India (CCI), is set to significantly expand JSW Energy’s power generation capacity.

Financial and Strategic Implications

With the acquisition, JSW Energy’s net debt to EBITDA ratio is projected to rise to 5.6x in FY26 before improving to 4.06x in FY27. As part of the agreement, lenders will receive a 26% equity stake, ensuring a 90% recovery of ₹29,330 crore in outstanding claims.

Analysts at Motilal Oswal estimate the net present value (NPV) of JSW Energy’s stake in KMPCL at ₹27 per share, factoring in the 1,800 MW brownfield expansion at the site. Despite concerns over rising debt, the company remains confident in the long-term benefits, projecting revenues to rise from ₹13,460 crore in FY25 to ₹19,460 crore in FY27, with EBITDA surging from ₹5,790 crore to ₹10,830 crore.

Market Outlook and Potential Risks

Motilal Oswal has reiterated a "BUY" rating on JSW Energy, setting a target price of ₹705 per share, implying a 60% upside from current levels. However, risks include cost overruns, uncertainties in Power Purchase Agreement (PPA) renewals, and ₹402 crore in contingent liabilities tied to KMPCL.

The acquisition marks JSW Energy’s aggressive expansion in the thermal power sector, where it faces strong competition from Adani Power, NTPC, and Jindal Power, which are also acquiring distressed assets. The final CCI approval for the deal is expected by Q1FY26.

HBL