JSW Energy Limited Investor Presentation August 2020
Agenda Overview Value Proposition Quarterly Highlights Appendix 2
JSW Group – Overview JSW Energy 1 : Engaged across the value chain of JSW Steel 1 : India’s leading integrated steel producer power business (Installed Capacity: ~4.6 GW) (Installed Crude Steel Production Capacity: ~18 MTPA) - Market Cap 2 : USD 1.1 Bn - Market Cap 2 : USD 7.9 Bn JSW Infrastructure : Engaged in development and JSW Cement: Manufacturer of PSC, OPC and GGBS cement (Operational Plants ’ Capacity: 14 MTPA) operations of ports (Operational Capacity: 113 MTPA) JSW Paints: Commenced operations in March 2019 JSW Ventures: Early-stage, tech-focused, venture (Annual Capacity: 125,000 KL); Only fully-automated, capital fund based in Mumbai (Portfolio: Purplle, water-based plant in India IndusOS, Limetray, Homelane) JSW Sports : Supporting Indian athletes and sports JSW Foundation: Social development arm of JSW ecosystem (Teams Owned: Bengaluru FC, Delhi Group, committed towards empowerment of Capitals, Haryana Steelers) communities, with a footprint across 11 states USD 12 Billion Group – Amongst India’s Largest Conglomerates (1) Listed companies 3 (2) USD/ INR = 75.0 Source: RBI reference rate as on Aug 7, 2020; Market Cap as on Aug 10, 2020
JSW Energy – Presence Across The Value Chain Operational Transmission Line – Current Installed Capacity : Power Power MSETCL 1 : JV with two 400KV 4,559 MW Generation Transmission transmission lines Power Trading Handling trading volume of Mining Producing 6-7 MTPA Lignite in ~1 Bn units Barmer through BLMCL 2 Amongst the Largest Private Independent Power Producers in India (1) Maharashtra State Transmission Company Ltd. 4 (2) BLMCL is a 49:51 JV between JSW Energy (Barmer) Ltd (100% subsidiary of JSW Energy) and Rajasthan Government undertaking
Leading IPP with ~4.6 GW of Installed Generation Capacity Baspa II: 300MW & Karcham Wangtoo: 1,091MW 4 • Configuration: 3x100MW (Baspa II) ; 4x272.75MW (Karcham) Barmer: 1,080MW Units operating: Baspa II since 2003 3 and Karcham Wangtoo • • Configuration : 8 X 135MW since 2011 3 • • Units operating: since 2009 3 Technology & Fuel Source: Hydro • • Technology: Sub-critical pithead Lignite based TPP Power Offtake: Long Term PPA • Asset Value to JSW Energy: INR 9,275 Crore/ $1,237mn 2 Fuel Source: Captive Lignite mines of BLMCL 1 • • Power Offtake: Long Term PPA • Project Cost: INR 7,165 Crore/ $956mn 2 Kutehr: 240 MW (Under construction) • 3x80MW Hydro Power Plant under construction Ratnagiri: 1,200MW • Awaiting regulatory approval for PPA with Haryana Discom • Configuration: 4 X 300MW • Units operating: since 2010 3 • Technology: Sub-critical TPP Salboni: 18 MW (Under construction) • Fuel Source: Imported Thermal Coal • 1x18MW Thermal Power Plant under construction • Power Offtake: Long Term PPA & Merchant • Project Cost: INR 5,516 Crore/ $736mn 2 Nandyal: 18 MW • 1x18MW Thermal Power Plant Vijayanagar: 860 MW • LT PPA under Group Captive scheme • Configuration: 2 X 130MW and 2 X 300MW • Units operating: since 2000 3 Solar: 10 MW • Technology: Sub-critical TPP • Fuel Source: Imported Thermal Coal & Gas • Ground based and rooftop solar power projects across • Power Offtake: Long Term PPA & Merchant various locations with captive power tie-up within JSW • Project Cost: INR 3,096 Crore/ $413mn 2 Group Well Diversified Fuel/Geography/Offtaker Mix (1) Long term FSA with BLMCL for supply of lignite from its captive mines (2) USD/ INR = 75.0 Source: RBI reference rate as of Aug 7, 2020 5 (3) Denotes start of first unit in respective calendar year; TPP – Thermal Power Plant (4) Current approved operational capacity at 1,000 MW. Pending CEA approval for uprating to 1,091 MW
Proven Track Record FY12 FY20 CAGR FY12 – 20: 7% Capacity (MW) 2,600 4,559 CAGR FY12 – 20: 6% Net Generation (MUs) 13,594 21,252 CAGR FY12 – 20 : 4% Total Revenue INR 6,265 Crore / $836mn 1 INR 8,560 Crore / $1,142mn 1 CAGR FY12 – 20: 9% INR 1,594 Crore/ $213mn 1 INR 3,244 Crore/ $433mn 1 EBITDA CAGR FY12 – 20: 26% INR 170 Crore/ $23mn 1 INR 1,100 Crore/ $144mn 1 PAT Thermal Coal, Lignite, Hydro, Diversifying fuel sources Fuel Type Thermal Coal Solar Power Generation, O&M, Power Generation, O&M, Presence across the value chain Business Segment Transmission, Trading, Coal Mining Transmission, Trading, Coal Mining Delivering Sustainable Growth driven by Focused Execution and Financial Prudence (1) USD/ INR = 75.0 Source: RBI reference rate as of Aug 7, 2020 6
Sound Corporate Governance Ensures regular review of audit plans, significant audit findings, adequacy of internal audit system, compliance with applicable regulations by the Company and its subsidiaries Audit Committee Comprises of four Independent Directors Identifies qualified persons and recommends to the Board the appointment, removal and evaluation of Directors Compensation and Responsible for drafting policy on specific remuneration packages for Executive Directors and approving the payment Nomination & of remuneration to managerial personnel Remuneration Formulate criteria for independence of Director, evaluation of Independent Directors, policy on Board diversity Committee Comprises of three Independent Directors Stakeholders Responsible for the functioning of the investor grievances redressal system Relationship Comprises of two Independent Director and one Executive Director Committee Risk Management Periodically reviews risk assessment and minimisation procedures Committee Comprises of one Independent Director and two Executive Directors Formulates and recommends to the Board a CSR Policy including list of projects and programs Corporate Social Responsibility (CSR) Periodically reviews the progress of CSR activities and programs Committee Comprises of two Independent Directors and one Executive Director All Key Committees in place; Adequate Independent Director representation 7
Agenda Overview Value Proposition Quarterly Highlights Appendix 8
Project Execution Expertise Driving Efficient Capital Allocation Project cost of select power plants set up by other players in the industry 1 st COD Power Project Capacity Project cost MW INR Crore/MW $mn/MW 2 Year JPVL (Nigrie) 1,320 7.92 2014 1.06 Barmer 1 Giral (Rajasthan) 250 7.69 2011 1.03 (2010-2013): Ratnagiri 1,080 MW @ DB Power (Janjgir-Champa) 1,200 7.02 2014 0.94 (2011-2012): INR 6.63 Crore 1 /MW 1 250 7.00 2010 Neyveli (Barsingsar) 0.93 1,200 MW @ (~$0.89mn/MW) 2 Vijayanagar GMR EMCO (Warora) 600 6.25 2013 0.83 INR 4.60 Crore/MW (2010): (~$0.61mn/MW) 2 Adhunik (Padampur) 540 6.18 2013 0.82 600 MW @ INR 3.28 Crore/MW Vijayanagar Dhariwal (Chandrapur) 600 6.22 2014 0.83 (~$0.44mn/MW) 2 (2000-2001): Lanco (Amarkantak) 600 5.23 2009 0.70 260 MW @ Tata Power/DVC (Maithon) 1,050 5.24 2011 0.70 INR 4.34 Crore/MW (~$0.58mn/MW) 2 Aryan Coal (Kasaipalli) 270 5.00 2011 0.67 Lanco (Udupi) 1,200 4.67 2010 0.62 (1) High capital cost due to CFBC boilers for lignite based power plant 9 (2) USD/ INR = 75.0 Source: RBI reference rate as of Aug 7, 2020
Diversified and Balanced Portfolio of Efficient Operating Assets Improving LT PPA tie-up rendering high cash flow visibility; Portfolio well-diversified across fuel sources ~98% of LTPPA under two-part tariff (fuel cost/forex pass through) 5,000 90.0% • 81.4% 80.4% Imported coal 75.0% • Lignite 64.5% 4,000 70.0% 3,638 3,579 • Hydro 3,328 • Renewable (RE) - Solar 2,866 3,000 50.0% 0.2% RE 2,000 30.0% FY17 FY18 FY19 FY20 30.5% Hydro LT PPA (MW) LT PPA (%) 23.7% Lignite Sound operating efficiency characterised by falling O&M Cost/MW; Imported coal Further, one among the lowest O&M cost in the sector 45.6% Period FY17 FY18 FY19 FY20 4,559 MW 19.4 19.3 18.7 17.9 O&M Expenses (INR Lakh/MW) 10
Robust Financial Risk Profile Amongst the strongest balance sheet in the Power sector Proactive debt reduction through prepayments/ repayments 3.8 13,384 3.5 4.0 3.1 2.8 ~INR 4,440 Cr 3.0 11,278 10,050 2.0 8,945 1.3 1.0 0.9 0.8 1.0 0.0 Mar-17 Mar-18 Mar-19 Mar-20 Mar-17 Mar-18 Mar-19 Mar-20 Net Debt (INR Cr) Net Debt/Equity (x) Net Debt/EBITDA (x) Ample liquidity characterized by robust cash accruals, and availability of undrawn bank lines that can be tapped in any exigency Existing business of JSW Energy continues to generate gross cash accruals of ~INR 2,100 Cr 1 annually Ability to raise Short-term lines/ WC lines/ Commercial Papers in excess of INR 1,000 Cr JSW Energy is the second largest entity in the USD 14 Bn JSW group, whose strong name in the market enhances the ease of tapping in both the ECM/DCM, which adds to financial flexibility JSW Energy holds ~INR 1,700 Cr 2 worth JSW Steel shares (#7 Cr shares) which further enhances financial flexibility (1) Computed as PAT+ Depreciation+ Deferred Taxes+ Exceptional items for FY20 11 (2) As on Aug 10, 2020
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