Jaiprakash Power Ventures Share Price

Jaiprakash HydroPower Limited

Jaiprakash HydroPower Limited (JHPL), a part of the well-known Jaypee Group, is a significant player in the Indian energy sector. It owns and operates the 300 MW Baspa II Hydroelectric Project located in Kinnaur District, Himachal Pradesh. Over the years, JHPL has played a pivotal role in developing and operating critical energy infrastructure in the country.

Formation and Early Development

Jaiprakash HydroPower Limited was originally established as a result of the efforts of the erstwhile Jaiprakash Industries Limited (JIL), which was later merged with Jaypee Cement Limited and is now known as Jaiprakash Associates Limited (JAL). The foundation for JHPL was laid when JIL signed a Memorandum of Understanding (MOU) with the Government of Himachal Pradesh (GoHP) in November 1991. This MOU was specifically for the development of the Baspa Stage II Hydroelectric project, which was approved in October 1992 by GoHP under a Build, Own, and Operate (BOO) model.

JHPL was officially incorporated on December 21, 1994, with a clear mandate to establish hydroelectric or thermal power projects and contribute to the supply of general electric power. Shortly after its incorporation, the company received the Certificate of Commencement of Business on January 9, 1995. This marked the formal beginning of the company's journey in the Indian power sector.

Project Financing and Initial Agreements

In March 1995, financial institutions approved the Baspa Stage II Hydroelectric Project with an estimated cost of ₹11,020 million. A Power Purchase Agreement (PPA) was signed as a pre-disbursement condition. Later in 1995, a tripartite agreement was executed between JHPL, JAL, and GoHP to transfer all assets, liabilities, obligations, and benefits arising from the MOU from JAL to JHPL.

By June 1997, the company had signed another PPA with the Himachal Pradesh State Electricity Board (HPSEB), aligning with the Implementation Agreement with GoHP. It was during this time that the financial institutions reappraised the project, leading to a revised cost of ₹12,630 million.

Technological Collaborations and Cost Escalations

As part of its efforts to equip the Baspa Stage II project with the latest technology, JHPL entered into agreements with Siemens AG Consortium, Germany, and Alstom T&D, France, in 1999. Siemens was tasked with supplying electromechanical equipment, while Alstom was responsible for providing GIS/GIB technology.

In 2000, financial institutions once again reappraised the project cost, revising it to ₹13,450 million. Further cost escalations occurred in 2002, bringing the total project cost to ₹16,120 million. Despite these cost increases, the Baspa II project was successfully completed and fully commissioned on June 8, 2003, making it India’s largest private sector hydroelectric project at that time. The total project cost stood at ₹1,624.72 crores, and the project began generating power upon commissioning.

Public Offering and Expansion

With the successful commissioning of the Baspa II project, JHPL decided to take its success to the public market. The company filed its prospectus with the Registrar of Companies (ROC), and all necessary approvals for its initial public offering (IPO) in the power sector were cleared by March 2005.

In the fiscal year 2005-2006, JHPL expanded its horizons by entering into a Memorandum of Understanding (MoU) with the Power Grid Corporation of India Ltd (PGCIL). The MoU was to promote a joint venture that would establish a transmission system for evacuating power from the 1,000 KW Karcham Wangtoo Hydroelectric Project. This move was part of JHPL’s broader strategy to diversify its energy portfolio.

Technological Upgrades

Given the challenges of operating in a high-silt environment, particularly during the monsoon season, JHPL took measures to minimize wear and tear on its equipment. In 2006, the company procured two modern technology spare runners with tungsten carbide coating, employing High Velocity Oxy-Fuel (HVOF) thermal spray technology. One of these runners was put into operation in May 2006, significantly improving the plant's durability and operational efficiency.

Regulatory Filings and Tariff Applications

In November 2007, JHPL filed a tariff application with the Himachal Pradesh Electricity Regulatory Commission (HPERC). This application was for the determination of tariffs for the financial years 2008-2009 to 2010-2011. The process of tariff determination was ongoing during this period.

Amalgamation and Expansion of Projects

In 2009, significant changes took place within the company structure. The Scheme of Amalgamation of Jaiprakash Power Ventures Limited (JPVL) with JHPL took effect from April 1, 2009. This scheme was sanctioned by the Honourable High Court of Himachal Pradesh at Shimla on November 20, 2009. Following this, the company changed its name from Jaiprakash HydroPower Limited to Jaiprakash Power Ventures Limited (JPVL) on December 23, 2009.

Further expansion occurred in 2011, when the High Court of Himachal Pradesh sanctioned the amalgamation of Jaypee Karcham Hydro Corporation Limited (JKHCL) and Bina Power Supply Company Limited (BPSCL) with JPVL. This amalgamation came into effect in July 2011, following the court's order. As a result, two significant projects – the 1,000 MW Jaypee Karcham Wangtoo Hydroelectric Power Plant and the 1,250 MW Jaypee Bina Thermal Power Plant – became part of JPVL’s portfolio.

The Jaypee Karcham Wangtoo project was particularly noteworthy, as its first 250 MW unit was commissioned on May 26, 2011, followed by the second unit on June 23, 2011. This project marked a major milestone in JPVL’s growth and solidified its position as a major player in the Indian power sector.

Strategic Restructuring and Sale of Assets

In 2014, JPVL’s Board sanctioned a Scheme of Arrangement to hive off the 300 MW Baspa II and 1,091 MW Karcham Wangtoo projects into two separate wholly owned subsidiaries. The plan was to eventually transfer ownership of these subsidiaries to a consortium led by TAQA India Power Ventures Private Limited. However, with the withdrawal of TAQA from the acquisition, the agreement automatically stood terminated.

In June 2015, the assets, liabilities, and rights of the 300 MW Baspa II and 1,091 MW Karcham Wangtoo projects were transferred to Himachal Baspa Power Company Limited (HBPCL), a subsidiary of JPVL. These assets were subsequently sold to JSW Energy Limited in November 2014 for an enterprise value of ₹9,700 crore, marking a significant divestment by JPVL.

Bara Thermal Power Plant and Subsequent Developments

In 2018, JPVL completed the implementation of the 1,980 MW Bara Thermal Power Plant, with three units of 660 MW each. While this was a major achievement for the company, the project faced challenges when the Prayagraj Power Generation Company Limited (PPGCL), which operated the plant, ceased to be a subsidiary of JPVL in December 2017 after the invocation of pledged shares by financial institutions.

In 2017, Jaiprakash Associates Limited (JAL), the promoter of JPVL, ceased to be the holding company following the conversion of loans into equity under the Strategic Debt Restructuring Scheme. However, JAL continued to hold 29.74% of JPVL’s shares, making JPVL an associate company of JAL.

Overview

Jaiprakash HydroPower Limited, now Jaiprakash Power Ventures Limited, has had a remarkable journey from its inception in 1994 to its current status as a major player in the Indian power sector. Through strategic acquisitions, technological advancements, and divestments, the company has continuously adapted to the evolving energy landscape. Despite facing challenges such as cost escalations and restructuring, JHPL has maintained its position as a key player in the hydro and thermal power sectors. With a focus on innovation and expansion, JHPL remains a significant entity in India's energy industry.