Bajaj Energy IPO

Strong PPA Agreements: Long-term PPAs ensure stable income with a two-part tariff structure and efficient receivables management, covering 100% of installed capacity.

Secured Fuel Supply: Long-term FSAs with Coal India ensure fuel stability, with cost pass-through mechanisms for imported or auctioned coal.

Proven Power Generation Expertise: Operates 450 MW and 1,980 MW plants with high availability, timely project execution, and efficient debt funding.

Strategic Market Position: Strongly positioned in Uttar Pradesh’s growing power market, driven by rising demand, electrification, and industrial growth.

Experienced Management Team: Management with 21+ years of experience, supported by a skilled 750-member technical team for efficient operations.

Dependence on Single Customer (UPPCL): BEL and LPGCL rely solely on UPPCL for income; payment delays or loss of UPPCL could severely impact their finances, with BEL’s 2018 income at ₹7,22 crore and LPGCL’s at ₹41,31.8 crore.

Disputes with UPPCL over Tariffs: LPGCL faces disputes with UPPCL over unpaid tariffs, risking a ₹7,53.8 crore write-off for coal shortages and ₹4,70.8 crore for equity returns, pending UPERC and APTEL rulings.

Audit Qualifications and Financial Risks: LPGCL’s 2018 audit flagged ₹24,96 crore in disputed income; adverse rulings could cut profits and equity by ₹5,16.4 crore, affecting BEL’s consolidated financials.

Contractual Risks with PPAs: UPPCL unilaterally terminated BEL’s PPAs in 2018, causing a 169-day shutdown and ₹54 crore loss; future cancellations could further harm BEL’s operations and revenue.

Loan Covenant Breaches: BEL and LPGCL breached loan terms, with debts of ₹1,901.35 crore and ₹1,55,65.15 crore as of 2018; defaults risk loan acceleration and credit rating drops to “D.”