JSW Energy Arm To Acquire O2 Power, O2 Energy And Their Subsidiaries For Rs 12,468 Crore

JSW Energy Ltd. on Friday said that its wholly-owned subsidiary has entered into pacts to acquire various companies involved in the energy management and clean energy systems space for a total enterprise value of Rs 12,468 crore.

JSW Neo Energy Ltd. has signed definitive agreements to acquire 100% interest in O2 Power Midco Holdings Pte. and O2 Energy SG Pte., as well as their subsidiaries, according to an exchange filing.

Sharad Mahendra, joint managing director and chief executive officer of JSW Energy, said the acquisition is the company’s “largest” since inception. He added, “This landmark acquisition strengthens our positioning as a leading player in India’s energy sector.”

According to the company, the acquisition “will leapfrog” its locked-in generation capacity by 23% — from 20,012 megawatts to 24,708 MW.

The filing also added that the move will help “strengthen” the company’s operational footprint across seven resource-rich states across India.

According to Pritesh Vinay, director of finance and chief financial officer of JSW Energy, “the acquisition of O2 Power’s renewable energy platform is significantly value accretive to the shareholders of JSW Energy.”

He elaborated, “This is a very attractive acquisition — both from ‘Build vs Buy’ trade off as well as from a quality and value perspective when compared to all acquisitions in this space over recent times, and is consistent with our long track record of being prudent in capital allocation and focusing on high cash returns projects above our hurdle rate of midteen Equity IRR.”

The company said that it expects to complete the proposed acquisition by May 26, 2025. However, the filing added that the transaction is subject to receipt of the necessary regulatory and other customary approvals.

For the deal to go through, the JSW Energy subsidiary needs approvals from the Competition Commission of India and lenders of the target companies.

Following the acquisition, these companies will become subsidiaries of JSW Neo Energy.

All of the target companies have a consolidated operational and under construction/development renewable energy portfolio of 4.7 GW in India.

The assets that JSW Energy will acquire include O2 Power's renewable energy platform of 4,696 MW.

Of this, 2,259-MW capacity will become operational by June 2025. Currently, a 1,463-MW capacity plant is under construction, while a 974-MW plant is in the pipeline. All of the facilities that are under construction will be commissioned by June 2027.

The platform has a blended average tariff of Rs 3.37/KWh with remaining life of about 23 years.

Shares of JSW Energy Ltd. closed 1.87% lower at Rs 625.05 apiece on the BSE, compared to a 0.29% advance in the benchmark Sensex.