two hydro power projects by the Jaypee Group is a case in point.
“Banks have managed to convince the promoter to sell two profitable hydro power plants,” a Standard Chartered report said.
“In the case of Jai Prakash Power, the promoters have pledged 97% of their equity in the company to lenders giving lenders a big say in the resolution of debt related issues,” they added.
The thermal power sector is among the most stressed sector, because of low availability of coal — which attracts fewer prospective buyers.
India's biggest electricity generator, NTPC, recently invited expressions of interest from state electricity boards and private companies as it looks to buy coal-based power plants in India and overseas to increase power generating capacity through acquisitions.
“Given its free cash, it could buy at best 2-3 such plants. Any acquisition of a private thermal plant by NTPC can only happen after the elections given that NTPC is state owned,” SC analysts said.