Union minister Piyush Goyal said state-owned NLC India plans to aggressively bid for Indian...
IL&FS Energy Development Company, involved in setting up of solar parks in public private partnership (PPP) with state governments, is looking at acquiring close to 150 MW of solar assets, and it has initially zeroed in on 9 projects to help it get there. The decision to buy solar assets comes close on the heels of the company selling its 40 MW solar asset in MP to IDFC Alternatives. The transaction was confirmed by the company to FE.
People close to the development told FE that the company is in the process of conducting due diligence of the 9 targeted assets. Details of the specific projects were not available due to confidentiality agreements, but some of the projects in the market that are up for sale include First Solar’s 50 MW capacity, Ganesh Jewellery’s 20 MW, Waree Energy’s 40 MW, Jackson Power’s 30 MW, Equis Solar’s 260 MW and ACME’s 250 MW, sources said. This could not be independently verified.
When contacted by FE, the company refused to comment on the subject.
A banker, on condition of anonymity, said, “IL&FS always looks for value creation either through their own asset creation or by purchasing assets at discounted rates. Typically, they look at assets at a discount of 15-20% to the market, to meet their valuation expectations.”
Solar valuations have been recently under stress due to a fall in solar tariffs, which have dropped to Rs 2.44/kWh from a high of Rs 17/kWh in 2010-11, due to aggressive bidding by builders and a consistent drop in solar panel prices. “We will see a lot of consolidation within the sector, where bigger players will take over stressed assets at discounted valuations. Also, the valuations will see pressure, though recent biddings are still crowded and aggressive,” said Arvind Tembhurne, an investment banker.
IL&FS Energy has till date invested more than `7,000 crore in renewable energy, across wind and solar. It has close to 900 MW of operational wind projects spread across several high wind states of India.
Punjab-based solar power solutions provider Hartek Group today said its power system business surpassed the 1,000-mw-capacity-mile-stone in solar installations across the country. “From 598 mw capacity as of March 2017, solar power system EPC projects executed by Hartek Power have now gone up to 1,143 mw, registering nearly a twofold growth,” company said in a statement. Involving 15 substations of up to 220 KV, the 545 mw projects executed in the current financial year include a 100 -mw project in Telengana, 50-mw project in MP, 25 mw project in Punjab, six projects totalling 180-mw in Karnataka, two projects of 140-mw in Rajasthan and four projects of 50-mw in Uttar Pradesh. “With other 285 mw projects under execution, we are expected to reach the 1,500 mw-mark by March 2018,” chairman and managing director Hartek Singh said.
With presence in 18 states, it ventured into the solar power systems domain just six years ago, and is focusing on the Southern markets and new geographies like Jharkhand and Bihar to consolidate its position now, he said. “At the same time, we are strengthening our hold in Punjab, Rajasthan and UP where we’ve traditionally been doing well,” Singh added.
Punjab-based solar power solutions provider Hartek Group today said its power system business...
The year 2018 begun with a little trepidation and uncertainty on the likely business outlook for the incoming months. It may be recalled that India ended 2017 with a subdued GDP of two quarters, slower manufacturing and industrial growth till October, GST related complexities and poor agricultural production. Things changed for better since November and Q3 ended much better for the industrial sector including brighter prospects for the services and primary sectors. The rising manufacturing prices that begun nearly six months earlier on the back of enhanced raw material prices leading to increased cost of production is a clear sign of growing demand. Consequently the PMI for manufacturing has improved in the country from 50.4 in January ’17 to 52.4 in January ’18. The business scenario got a much needed boost from the global trends of improved manufacturing and industrial output and market realisation, the emergence of Europe and US markets facilitating increased flow of goods and services dampened only by the plethora of protectionist measures.
Steel industry continues to grow and establish its importance as the essential ingredient for economic growth. Availability of the material being taken care of by rising level of production and increasing share of value added items, it was fast becoming the most preferred material for the architects and the designers as a flexible, ductile, earth quake resistant, fire resistant, recyclable and sustainable item for choice that leads to faster construction, elegant structures, easy to maintain and relocate, if need be. The current market scenario in the country buoyed by a favourable global market can best be summarised as most appropriate to take forward the planned expansion in capacity to cater to the emerging market, both domestic and exports. Things are indeed looking up to take the country fulfilling the 300 MT capacities in crude steel production by 2030.
Growth in steel consumption in Q1 of FY18 at 4.6 % has reached 6.8% in January ’18. Production of crude steel at 4.2% growth in April-January ’18 reached 84.4 MT. India is likely to end FY18 with finished steel consumption at 90 MT(growth of around 7.0% over FY17) and CS production of 102MT. The short range outlook by World steel Association has projected India’s finished steel consumption at 92.1 MT in 2018 (5.7% growth). This is against the estimated growth in Global steel consumption of 1648.1 MT at 1.6% growth in 2018. The finished steel exports from India are likely to be around 11.0 MT by March ’18 with a growth of around 34% over the previous year. The finished steel exports are going to be more than 10% of domestic CS production against the global average of 21-23%. The estimated imports in FY18 may be put at 8.0 MT, a rise of 11% over last year, thanks to the timely support from the government for imposing measures against trade distorting practices of a few countries in the global trade.
Prices of HRC exported by China at $369/t (SS 400 grade ex-Tianjin) in October ’16 are currently available at $585/t in February ’18 (10th February ’18), a rise of 59% over a period of 16 months. The prices of Turkish export (fob) for rebar at $370/T in October ’16 is currently available at $ 558/T in February ’18 (February 10, 2018), a rise of 51% during the period. The domestic price of HRC ex-Mumbai (all inclusive) that was `33625/T in October 2016 is presently ruling at `46,020/T (all inclusive), a growth of 37% during the period.
This favourable scenario for industrial growth and especially for growth of steel consumption has been facilitated by the allocation of `5.97 lakh crore in the Budget for FY19 for the infrastructure sector which is a 21% rise over last year. It is not immediately known how much was actually spent on building of infrastructure in the last year. As this amount has been allocated among various departments like, coal, petroleum, power, steel, new and renewable energy, civil aviation, defence, railways, atomic energy, road transport and highways, shipping, housing and urban affairs, telecommunication, higher education for capital expenditures, we may assume that in all these areas, the actual implementation has the higher elements of steel based construction. Applying the standard formula, this volume of capex would need approximately 26.5 MT of steel. Many of the fresh projects would generally spill over in the next year and beyond and also there would be normal delays in commencing all the identified projects during the year itself. In addition, the budget allotted to rural development ministry for PMAY-G, ministry of panchayat raj for drinking water supply in villages, health and sanitation, rural roads under PMGSY would also be using steel in a limited manner. Taking all these factors into consideration, we may assume that at least 25% of the estimated incremental demand of around 6.6 MT would be realised in FY19 on the back of this investment. However, promotion of steel based construction and the various advantages in terms of cost, ease of construction, saving in time, environment friendly construction and flexibility in design have to be taken up in right earnest with the identified executing agencies, government and private, by all the stakeholders.
India will explore foreign markets like Sri Lanka, Nepal and Bangladesh for its surplus power generation capacity, Power Minister R K Singh said today. His comments assume significance as the average plant load factor or capacity utilisation in India is around 60 per cent. “We can run our plants at 80 per cent PLF (plant load factor) but coal is a constraint. It does not make sense to import coal when we have sufficient coal underground. We need to build more railway lines to transport coal,” Singh said addressing a conference organised by NTPC. He further said: “We need to explore foreign markets like Sri Lanka, Nepal and Bangladesh. Demand is there. We need to access that. They are short of power”.
He was of the view that there is need to unlock the demand by not just exploring foreign markets but also increasing power demand in the country. He also asked NTPC to explore the possibility of investments in other countries to widen their horizon in view of surplus installed capacity in the country. Singh also said the panel constituted by Power Ministry on Unchahar power plant accident last year, has submitted its report, which would be reviewed soon.
He said he does not see it as a mala fide incident. One incident will not change NTPC’s image because it is known for safety and efficiency, he said. The minister also opined that the cheap renewable power alone cannot meet the entire demand in view of fears among conventional energy operators after free fall in tariffs of wind and solar power last year.