Mumbai: Jindal Steel and Power Ltd (JSPL) has emerged as the lowest bidder to supply 500 megawatts (MW) of electricity to a state-owned entity. The company is yet to sign the final agreement for the contract, scheduled to commence in the second half of FY20. If signed, the deal can make a material difference to the company’s power business and perhaps to its consolidated earnings.
As of December 2019, only 30% of JSPL’s 3,400MW commercial capacity is tied up with commercial agreements. The addition of a 500MW contract can take the operating capacity to 45%, improving utilization levels.
The development comes as JSPL’s core steel business in India is seeing an improvement in volume. Production in the recently-ended March quarter (Q4) rose by a fifth. Commissioning of production at the intermediate and downstream plants is expected to keep up the growth tempo.
