Jindal Steel & Power (JSPL) said its subsidiary Jindal Power has signed a definitive agreement to offload 4.12 per cent equity stake in Indian Energy Exchange (IEX) for an undisclosed amount, as per a stock market disclosure.
The deal is expected to be completed by the end of this month. The company is expected to realise the consideration in the current financial year, it said.
Based on recent transactions the IEX stake could be worth around Rs 89 crore ($13.2 million).
JSPL has been hurt due to cancellation of coal blocks and payment of additional levy on coal of over Rs 3,300 crore in financial years 2014-15 and 2015-16, as a result of a Supreme Court ruling in September 2014 that nullified nearly all the 218 coal blocks the central government had allocated between 1993 and 2010, saying the allocations were illegal.
“JSPL will be in a better position to generate higher cash flows as compared to last four quarters. Our efforts in bringing cash into company through divestment of assets and strategic collaborations through JVs, as previously advised, will add to our cash flows, and also result in reduction in Bank borrowings,” it said.
"We have used these difficult times as an opportunity to cut costs to become efficient and nimble footed,” it said.
IEX offers an online electricity trading platform for trading, clearing and settlement operations. As per its site, over 800 private generators and more than 2,800 open access consumers are leveraging the exchange platform to manage their power portfolios.
In September 2015, Financial Technologies (India) Ltd (FTIL) had said it will offload 19.06 per cent stake in IEX for Rs 410 crore (over $62 million then) to a clutch of buyers, including DCB Power Ventures Ltd, Kiran Vyapar Ltd, Agri Power and Engineering Solutions Pvt Ltd and Aditya Birla Private Equity.
A month later, FTIL had entered into an agreement with Madison India for sale of 1.58 per cent stake in IEX for Rs 33.96 crore (over $5.2 million then).
In November last year, FTIL exited IEX by selling its remaining 0.37 per cent stake to a fund run by Madison India.
In September last year, home-grown private equity firm TVS Capital had picked 3.1 per cent stake in IEX for Rs 72 crore. A month later, it had increased its stake in IEX to 4 per cent by shelling out Rs 9 crore more.
IEX also counts other private equity and venture capital investors including Multiples PE and Lightspeed Venture Partners.