FII Increases Stake in SJVN Ltd: New Joint Venture Company Established

SJVN

Major Investment Boost for SJVN Ltd

In a significant development, SJVN Limited witnessed a substantial increase in its shareholding as Foreign Institutional Investors (FIIs) bought 2,68,31,848 shares, reflecting their growing confidence in the company’s potential. This move comes as SJVN Limited, a government-owned enterprise, announces the formation of a new joint venture company in collaboration with Assam Power Distribution Company Limited, further expanding its footprint in the renewable energy sector.

Establishment of SGEL Assam Renewable Energy Limited

SJVN Limited’s wholly-owned subsidiary, SJVN Green Energy Limited, has teamed up with Assam Power Distribution Company Limited to establish SGEL Assam Renewable Energy Limited. With an authorized capital of Rs 1,000 crore, this joint venture will primarily focus on renewable energy generation, including the development of hydropower plants. Notably, SJVN Green Energy Limited will hold a majority stake of 51 per cent in this venture, emphasizing its commitment to sustainable energy solutions.

Strategic Vision and Growth Targets

The establishment of SGEL Assam Renewable Energy Limited aligns with SJVN Limited’s ambitious growth targets. The company aims to achieve a capacity of 25,000 MW by 2030 and 50,000 MW by 2040, in line with the Government of India’s objective to generate 50 per cent of energy from non-fossil fuel-based resources by 2030. This strategic vision underscores SJVN Limited’s dedication to driving innovation and sustainability in the energy sector.

Diversified Business Portfolio

Apart from its core business of electricity generation, SJVN Limited is actively involved in providing consultancy services for hydropower projects, further diversifying its revenue streams. The company has consistently maintained a healthy dividend payout of 72 percent, with a dividend yield of 4.38 percent, indicating robust financial performance and shareholder value creation.

Positive Financial Outlook

SJVN Limited has demonstrated strong financial performance, evident from its positive quarterly and half-yearly results for the year ended September 30, 2023. The company’s strategic initiatives and prudent financial management have garnered investor confidence, reflected in the increased stake by FIIs and sustained market performance.

Market Performance and Investment Potential

Despite a minor decline in share prices on Friday, SJVN Ltd remains an attractive investment opportunity, with a market capitalization exceeding Rs 48,000 crore and a remarkable 3-year CAGR of 50 per cent. Notably, the stock has delivered multibagger returns of 277 per cent in just one year, outperforming the BSE Sensex Index by a significant margin. Investors are advised to monitor this power stock closely, given its promising growth trajectory and potential for long-term value creation.

Disclaimer

It’s essential to note that the information provided in this article is for informational purposes only and should not be construed as investment advice. Investors are encouraged to conduct thorough research and consult financial experts before making any investment decisions.

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