Inside Financial Markets

JSCL – Accumulating Value from Power sector- A Possible two bagger!

JSCL – Accumulating Value from Power sector- A Possible two bagger!

According to the recent notice by Jahangir Siddiqui Co ltd (JSCL)the company is prequalified by Punjab privatization board in relation to the acquisition of 100% equity stake of Quaid-e-Azam solar power unit a 100Mw built up solar power plant located in district Bahawalpur , Punjab from Government of Punjab as privatization transaction. However the transaction is currently in the process of obtaining all the regulatory and internal approvals.

About the project : The Quaid e Azam solar plant of 100MW is built by Chinese company- Tebian Electric apparatus (Largest Solar EPC Company in the world) on a 500 acres land, While access road of the project coupled with transmission line and auxiliary power station ( Already Completed ) is provided by Punjab government, The Plant is expected to come online by 2018 where major construction work is already completed (Plant Construction started in 2014)
Other Investment : Moreover the additional available land of 9500 acres will be utilized in other investments where 6500 acres is already allotted to additional 900MW solar power project which will be developed through IPP, while other 3000 acres shall remain available for long term power projects, This renewable  project remains critical for the country as upbeat investment in coal fired unit will soon jack back country’s carbon footprint (coinciding with Paris Climate Deal) while materialization of solar power plants shall keep the country ‘s carbon ratio intact, hence strengthening further investment in power sector.

EPS Impact : The total project cost is estimated to close around USD 150mn (USD 1.5mn / MW) while equity portion of the company will be financed through cash and STI’s. on sustainable 15% dollar based IRR and (19% on PKR terms) warning of the company is expected to increase by PKR 0.85/share or ( +55% YOY) translating into stock price accretion of PKR 6 per share

Ahsan Baig

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Inside Financial Markets was a joint publication of Pakistan Stock Exchange (PSX)and Society of Technical Analysts Pakistan (STAP)