Bajaj Energy
Issue details
- Listing at
- NSE
- CIN
- U40102UP2008PLC046764
- Registered office
- Khambarkhera, Shardanagar Road, Lakhimpur Kheri 261 506
Company financials
Consolidated ·₹ crore unless a row shows % or ×, as reported in the offer document
| Period ended | FY18 | FY17 |
|---|---|---|
| Profit and loss | ||
| Total income | 89,762.5 | 1,40,587.6 |
| Revenue from operations | 85,519.7 | 1,37,094.3 |
| Other income | 4,242.8 | 3,493.3 |
| Total expenses | 84,931.7 | 1,32,478.6 |
| Operating profit | 4,830.8 | 8,109 |
| Operating margin | 5.38% | 5.77% |
| Profit before tax | 4,830.8 | 8,109 |
| Profit after tax | -339.5 | 10,771.2 |
| PAT margin | -0.38% | 7.66% |
| Balance sheet | ||
| Total assets | 3,47,415.5 | 3,68,409.7 |
| Current assets | 69,842.5 | 71,298.1 |
| Current liabilities | 69,557.6 | 71,072.6 |
| Total liabilities | 2,16,789.7 | 2,37,576.7 |
| Net worth | 1,30,625.8 | 1,30,833 |
| Current ratio | 1.00× | 1.00× |
| Return on equity | -0.26% | 8.23% |
| Cash flow | ||
| Operating cash flow | 30,488.6 | 65,400 |
| Investing cash flow | 9,494.8 | -26,054.7 |
| Financing cash flow | -40,278.4 | -38,543.8 |
| Net cash flow | -295 | 801.5 |
Objects of the issue
Stated use of the net proceeds— open a row for the issuer's full explanation
1 Purchase of LPGCL Shares ₹4,972 Cr
To purchase 69,936,900 LPGCL Shares from BPVPL and BHSL, resulting in 100% shareholding in LPGCL. This acquisition aims to consolidate the company's power business and increase revenues.
2 General Corporate Purposes —
To fund strategic initiatives, meet exigencies, working capital requirements, servicing interest obligations, repayment of loans, and other purposes as approved by the Board. The amount will not exceed 25% of the Net Proceeds.
1 of 2 objects carry no stated amount — typically general corporate purposes, funded from whatever remains — so the total above is the quantified portion only, not the whole issue.
About Bajaj Energy
The company is one of the largest independent power producers in Uttar Pradesh with long-term, regulated PPAs with a take-or-pay feature. The company has a successful track record of developing, financing and operating thermal power plants. The company is well-positioned to capitalize on the growth and demand of Uttar Pradesh's power industry. The company has an established management team with extensive operational experience. The company aims to enhance productivity and operational efficiencies, and optimize the value of its asset portfolio through an efficient capital structure.
Management
Kushagra Bajaj
CEO
Tara Sankar Bhattacharya
Director
Santosh Balachandran Nayar
Director
Dhananjay Nilkanth Date
Director
Naina Krishna Murthy
Director
Shalu Laxmanraj Bhandari
Director
Prabal Banerjee
Director
Dr. Ajay Vikram Singh
Director
Strengths
As stated in the offer document
Large independent power producer in Uttar Pradesh with long-term regulated PPAs
The company is one of the largest independent power producers in Uttar Pradesh with power generation capacity of 2,430 MW fully contracted through long-term regulated PPAs with take-or-pay feature and fuel cost pass-through. The PPAs have remaining average terms of 18-23 years, providing long-term stable income streams.
Secured fuel supply
The company has long-term fuel supply agreements with subsidiaries of Coal India Limited for 20 years or plant life, whichever is earlier. This provides security of fuel supply in the long-term. The fuel cost pass-through structure in PPAs further mitigates fuel supply risks.
Successful track record in power plant development and operations
The company has successfully developed, financed and operated multiple thermal power plants. Its plants have achieved high availability factors of at least 85% annually. It has established relationships with suppliers and raised significant debt funding for projects.
Well-positioned to capitalize on Uttar Pradesh's power demand growth
The company's assets are based in Uttar Pradesh, which has the second highest power demand in India. Power demand in the state is expected to grow at 9.5% CAGR from 2019-2022, driven by increasing consumption and electrification. The company is well-positioned to benefit from this growth.
Experienced management team
The company's key managerial personnel have on average over 21-28 years of experience in the power sector. They are supported by technical teams with around 750 experienced employees handling plant operations and maintenance.
Risk factors
As stated in the offer document
Reliance on a single customer
The company (BEL and LPGCL) relies on a single customer. Any inability or failure by the customer to meet its payment commitments will have a significant and material adverse effect on the company's business and financial condition.
Disputes with UPPCL
LPGCL is currently involved in disputes with UPPCL relating to payment of tariffs, including availability loss of fixed tariff charges due to non-availability of coal, return on equity payments during the period when coal linkage was not available, and recovery of fixed tariff charged for the period in which a transmission line was not made available.
Audit report qualifications
There are qualifications in the audit report of LPGCL's financial statements for Fiscal 2018 and consolidated financial statements of the Company for Fiscal 2018. There are also emphasis of matter in the audit reports for each of LPGCL and consolidated financial statements for BEL for the nine months ended December 31, 2018, LPGCL Restated Financial Information and the Restated Consolidated Financial Information and the Unaudited Restated Proforma Financial Information for nine months ended December 31, 2018 in respect of LPGCL's ongoing dispute with UPPCL.
Contractual risks under PPAs
The company is subject to contractual risks under its PPAs with power purchasers which are government entities.
Non-compliance with financial covenants
The company has in the past not been, and continues not to be, compliant with certain financial and other covenants in relation to certain loan agreements. This has resulted and potentially could result in an event of default under the respective loan agreements and cross-defaults under other instruments, thereby accelerating the company's obligations.
Fuel supply risks
Operation of the company's thermal power generation business has significant coal requirements. The company faces fuel supply risks, despite having entered into long-term FSAs. The company may be unable to ensure uninterrupted availability and/or required quality of coal at competitive prices or at all, which may have an adverse effect on its business, results of operations, and financial condition.