JSW Energy Ltd’s decision to scrap its plans to enter the electric vehicle (EV) segment has brought much relief to its investors. The stock has risen in recent trading sessions, although it gave up some of those gains on Wednesday.
According to Motilal Oswal Securities Ltd, the company spent ₹25 crore to set up a team to evaluate the EV business. While that money may have gone down the drain, investors are relieved that it backed down from the plan to invest as much as ₹6,500 crore in an unrelated business. The decision underscores the company’s prudence regarding investments. It had evaluated several buyouts in the past, but made only one notable acquisition—that of two hydropower plants from Jaiprakash Power Ventures, wherein the power offtake was assured.
