High Debt-Funded Capex Execution
Consolidated debt will nearly double to INR 28,000 crore over two years to fund 4,836 MW under construction. Cash flows will not increase proportionately until projects commission, creating near-term leverage risk.
SJVN / bear-case history
Track the concerns that keep returning.
SJVN · risk themes across the available quarters.
Research layer active
Bear-case history
Risks carried through the record.
high
Arun-3 Merchant Power Pricing Uncertainty
The 900 MW Arun-3 project in Nepal is a merchant power plant with no cost-plus tariff protection. Management targets Q3 FY26 commissioning but revenue realization depends on market power prices at that time.
Analyst Tariff Question Deflected
Analyst Mohit Surana questioned the blended tariff drop to INR 2.60/unit (down 17% YoY) and asked about excess generation pricing. Management responded that tariffs cannot be averaged across projects and did not address the year-over-year decline or excess power monetization.
Rooftop Solar Scheme Execution Ambiguity
SJVN was allotted Himachal Pradesh, Punjab, and Arunachal Pradesh under PM Surya Ghar scheme plus 18 ministries for rooftop solar. However, management could not specify capacity targets, citing vendor empanelment is still in progress. Execution timeline remains unclear.
Devsari Hydroelectric Project Suspension
INR 250 crore already spent on the project which has been halted by environmental concerns and Supreme Court proceedings. Recovery of capital is uncertain pending government intervention.
Arun 3 Project PPA Not Signed
Management admitted PPA has not been signed for Arun 3 and they are planning to float a fresh tender, creating revenue uncertainty for this flagship Nepal project expected September 2025.
Buxar Thermal Project Delay
First unit commissioning slipped from October-December 2024 to January 2025 due to rail infrastructure issues. Second unit targeted June 2025. Coal transportation via 5 km road from Chausa railway station may create operational constraints.
PPA Cancellation Risk in REIA Portfolio
Management acknowledged that hybrid tender prices have moved from 350 paise to 319 paise per unit, creating incentive for developers to abandon higher-priced PPAs. Some projects may face termination risk.
Transmission Connectivity Bottleneck Delaying RE Projects
Despite winning tenders for 13.74 GW and issuing LOAs, only 3.74 GW has signed PSAs/PPAs. Grid connectivity issues, transmission line shortages, and Supreme Court-related matters are blocking project commissioning, particularly in Rajasthan and Gujarat.
PPA/PSA Signing Uncertainty for Awarded Tenders
Stakeholder consultations underway with Ministry of Power, MNRE, and bidders on ~9-10 GW of awarded capacity awaiting PPA signing. Rebidding possibility remains; clarity expected in 2-3 months.
Revenue Pressure from Himalayan Floods
Nathpa Jhakri and Rampur plants faced shutdowns due to high silt and flood conditions in Himachal Pradesh, impacting plant availability factor and reducing capacity/energy charges by estimated INR 50-60 crore. This is recurring weather-related risk.
Tax Benefit Expiry and Rising Finance Costs
Loss of Section 80-IA exemption (INR 52 crore impact) for a project that completed 10 years. Finance costs increased ~INR 50 crore YoY as projects move from CWIP to commissioned assets with associated debt servicing.
PSA/PPA Signing Delays for RIA Projects
Of the 7.5 GW tendered and 2.4 GW awarded under REIA vertical, PPAs remain unsigned due to DISCOM reluctance to sign Power Sale Agreements. Management expects resolution within two months but timing uncertainty persists.
Arun-3 Geological Challenges
Nepal's 900 MW Arun-3 hydro project faces geological surprises at dam site, pushing commissioning from FY26 to Q4 FY27. This is a ~1.5 year delay affecting flagship project timeline.
Rising Interest Costs Pressure Near-term Margins
Finance costs increased significantly due to capital infusion for under-construction projects and securitization deployment in renewables. Management expects improvement only post-FY26 commissioning.
Bikaner Solar Execution Risk
1,000 MW Bikaner project dependent on Tata Power module supply (EPC contractor). Industry-wide CPSU scheme delays with Indian module mandate affecting commissioning timeline. Investor questioned accuracy of earlier capacity addition guidance.