M&A Prospects in Indian Power Generation Sector:Identifying Thermal, Wind, Solar and Biomass Power Plants likely to be up for Sale

Mar, 2014   |   180  Pages   |   Infrainsights   |   Format : PDF

About 65,000 MW of thermal capacity across India runs the risk of turning into bad assets; Given a capital cost of Rs 5 crore per MW, that is upwards of Rs 3,00,000 crore at risk; much of this is bank loans as these projects, typically, came up with a 80 per cent debt component

Companies that had acquired land, signed MoUs (memorandums of understanding), coal linkages, etc are now looking to sell and exit

As per an estimate, as many as 700 thermal plants across India applied for an environmental clearance between 2006 and 2010. Between them, they were looking to add 701,820 MW of capacityabout six times India's overall power capacity in 2011 and seven times the target for the 12th five-year plan (2012-17)

The M&A space in the power generation sector in India is expected to gain further traction from hereon. InfraInsights is of the view that this is the most conducive time to buy these assets for anyone looking for strategic investment in Indias power story. Most of the Indian companies that entered into power sector with short term goals are seeing themselves being trapped into the sector and are surrounded by some of the un-expected development both on structural and commercial front, these companies want to exit from power business. There are companies that went on investment spree over the years only to find that the economic slowdown in India has hammered their balance sheets out of shape, and hence ar

1. Executive Summary

2. Evaluating Factors Favoring Investments in Power Generation Sector in India
Demand Supply Scenario
Revenue Models (Merchant Sale, Open Access, PPA)
Regulations & Policies
Trends in Power Prices in India ( Generation & Distribution Level)

3. Evaluating Factors Risking Viability & Sustainability of Power Generation Sector in India
Widening Fuel Demand and Supply Gap
Challenges in securing Fuel Linkage
Impact of Land Acquisition Bill
Rupee Devaluation
Increasing Cost of Capital
Leveraged Balance Sheet
Restrictions on Importing BTG
Water Shortage

4. Status Check on Upcoming & Planned Power Plants in India
Thermal Power Coal & Gas
Wind Power
Biomass Power
Solar Power

5. Status Check on New Investment / Expansion Plans of Companies in Power Generation Sector
Indian Companies likes of Adani, Reliance Power, Tata Power, CESC, Torrent, Lanco, GMR, Essar, NTPC
MNCs likes of CLP, GDF Suez, E.ON, AES

6. Trends in M&A deals in Power Generation Sector
Whos buying Analyzing Strategy
Whos selling Analyzing Reasons for Exit (Distress Sale, Strategic Exit)
Number of Deals in Value and Volume
View of Investment Bankers
Trends in Valuations

7. Detailed Asset Profiling of Assets up for Sale Primary Survey
Project Location, Name , Capacity Current Status, Size, Fuel, Project Type
Technology Used
Date of Start of Construction & Planned Date of Commission
PPA Status, Fuel Linkage
Capital Investment Equity vs Debt
Ownership Pattern
Challenges Faced
Looking for Stake Sale / Exit

8. Identifying Key Reasons for Exiting Power Generation Business
Private Indian Companies
MNCs Operational in India

9. Regulations Governing M&A in Indian Power Sector

10. InfraInsights Due Diligence of Shortlisted Attractive Assets
Distress Sales Vs Valuation Sales

11. Power Plants Asset Database
Thermal Power Coal & Gas
Biomass Power
Wind Power
Solar Power

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