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We have mixed feelings about the proposed sale of Jindal Power Ltd. by Jindal Steel and Power Ltd.
While we find the enterprise value of approximately Rs 95 billion, implying five times FY22E enterprise value/Ebitda, for the asset a bit underwhelming, it does improve the growth outlook for the steel business by freeing up both the balance sheet and management bandwidth.
The company has already announced its intent to double capacity at Angul to 12 million tonnes per annum.
Moreover, by hiving off thermal power plants and reducing its carbon footprint, access to global capital should improve for the company.
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