Shares of a power generation company appreciated to the tune of 5 percent to reach an intraday high of ₹ 63.80 apiece on the National Stock Exchange (NSE) after its subsidiary bagged orders worth ₹ 1,900 crores. At 01:58 PM on Tuesday, its shares were trading at ₹ 61.85 apiece.
SJVN Ltd informed the bourses that its wholly-owned subsidiary SJVN Green Energy Limited (SGEL) has received Letters of Award from Assam Power Development Corporation Limited (APDCL) for three Solar Power Projects with a cumulative capacity of 320 MW.
SGEL had participated in three separate tariff-based competitive bidding tenders of APDCL, i.e. 50 MW, 70 MW and 200 MW. The 50 MW and 70 MW projects are under the solar park category and have been allotted at a tariff of INR 3.92/Unit and the 200 MW is to be developed anywhere in Assam and has been allotted at a tariff of INR 3.90/Unit, as per the filing.
The solar power projects will be developed on Build Own and Operate (BOO) basis. The projects shall be commissioned in a period of 18 Months from the date of signing of the PPA (Power Purchase Agreement) and are expected to be commissioned by March 2025. The PPA shall be signed between APDCL and SGEL for 25 years. The tentative cost of construction/development of these 320 MW projects is around ₹ 1,900 crores.
The commissioning of these projects is expected to reduce 7.14 lakh tonnes of carbon emission and would contribute to the Government of India’s mission of reduction in carbon emission.
In the past year, SJVN’s share price increased from ₹ 29.95 to ₹ 63.80, delivering multibagger returns of 113 percent. Therefore, if an investor had invested ₹ 1 lakh in the company’s shares one year ago, the value of their holdings would have been ₹ 2.13 lakh today!
With a market capitalization of ₹ 23,893 crores, SJVN is a mid-cap company. It has a low return on equity of 7.48 percent and a debt-to-equity ratio of 1.01. Its shares were trading at a price-to-earnings ratio (P/E) of 23.38, which is higher than the industry P/E of 16.15, indicating that the stock might be overvalued as compared to its peers.
The company’s promoters hold an 86.77 percent stake in the company followed by retail investors with 7.51 percent, mutual funds with 4.08 percent, foreign institutions with 1.40 percent and other domestic institutions with 0.24 percent.
Written by Simran Bafna
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