July 24, 2023 – In a significant boost to its renewable energy portfolio, SJVN Ltd (SJVN) saw its stock surge by 14.17% to hit a 52-week high of Rs 57.20 on the Bombay Stock Exchange (BSE) today. The remarkable upswing came after the power producer announced securing a substantial contract from Punjab State Power Corporation Ltd (PSPCL) for the development and procurement of 1,200 MW of solar power, entailing an estimated investment of Rs 7,000 crore. The market cap of the company concurrently rose to Rs 22,112 crore.
The Letter of Intent (LOI) for the procurement of 1,200 MW of solar power was received by SJVN from PSPCL, setting the stage for a large-scale solar energy project that is expected to play a pivotal role in bolstering India’s renewable energy capacity.
According to the terms of the contract, SJVN Green Energy Ltd (SGEL), a wholly-owned subsidiary of SJVN, will spearhead the development of 1,000 MW of solar power project anywhere in the country. Additionally, the remaining 200 MW will be developed within the state of Punjab itself. The power generated from the 1,000 MW solar project will be procured by PSPCL at a tariff of Rs 2.53 per unit, while the 200 MW produced in Punjab will be procured at a slightly higher tariff of Rs 2.75 per unit, as stated by the company.
This ambitious solar power project will be executed on a Build Own and Operate (BOO) basis, with an investment outlay of approximately Rs 7,000 crore. Given the scale and significance of the venture, the project is slated to be completed within a span of 18 months from the date of signing the power purchase agreement (PPA). With the commissioning expected by the end of the following year, the PPA between PSPCL and SGEL is set to span 25 years.
The news of securing the PSPCL contract has had an immediate and notable impact on the SJVN stock, propelling it to reach a 52-week high. The stock’s surge has been accompanied by notable bullish technical indicators, with the relative strength index (RSI) of the stock standing at 71.6, indicating it’s trading in the overbought zone. Additionally, SJVN shares have displayed low volatility, with a beta of 0.9 in the past year, further boosting investor confidence in the company’s prospects.
This major solar power project aligns with India’s ambitious renewable energy targets and contributes significantly to the nation’s commitment to combating climate change. It also positions SJVN as a key player in the renewable energy landscape, expanding its footprint in the solar sector and reinforcing its commitment to sustainable energy solutions.
Investors have expressed optimism and confidence in SJVN’s future growth prospects, evident from the brisk trading activity on the stock exchange. A total of 37.75 lakh shares exchanged hands, amounting to a turnover of Rs 20.98 crore on the BSE.
The announcement of the solar power project comes at a time when the global energy transition is gathering momentum, and countries are increasingly emphasizing the need for cleaner and greener sources of energy. SJVN’s proactive approach in securing this significant solar power contract underscores its commitment to environmental sustainability and its determination to play a leading role in India’s renewable energy journey.
As the world shifts towards cleaner energy alternatives, SJVN’s strategic move to invest in solar power infrastructure is not only expected to be financially rewarding but also holds the potential to make a positive and lasting impact on the environment, contributing to a more sustainable and green future for generations to come.