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The Jaiprakash Group, which is selling its entire hydropower portfolio to Anil Ambani's Reliance Power, is determined to bounce back in the sector by building up to 5,000 MW of new capacity, and also aims to rise to the top league of the real estate business by building seven smart cities and completing 300 towers in about two years. Jaiprakash Associates' executive chairman Manoj Gaur said that more deals were in the offing, in addition to the INR 12,300-crore deal with Reliance Power, which will reduce the debt, currently INR 65,000 crore, to a manageable level.

"With our hydro power projects being valued at INR 12,300 crore, we will be able to bring down our debt to around INR 52,000 crore. We will do a couple of more transactions in next six months and we should have debt of INR 37,000 to INR 40,000 crore at group level by March 2015. I am sure that the economy would have picked up by then and it should be a reasonable debt level for the group to service easily," Gaur in an interview. He said the company valued its hydropower assets, but the family but the family took the emotionally difficult decision "with a detached heart" to ensure that it would service its debt and maintain goodwill. Responding issues about valuation of the assets by the Adani Group and JSW, which were also negotiating, Gaur said: "Till 2013, balance sheet of Jaiprakash Power Venture reflects only the operational results of these three projects and the profitability has been best among all power companies of India. So, valuation is always and shall continue to be decided by merit of asset and not only based on computation of return of equity. Other contenders, JSW and Adani, have own perceptions based on their computations, but I can only say that my father, Reliance, Adani and Jindal are entrepreneurs. When they started their businesses, they were not thinking of return on equity. And then they made success out of that."

Gaur said the deal with Reliance Power was signed quickly, but the two sides had first discussed equity participation in the Baspa hydro project in 1998 when the JP Group was seeking equity. "We have a long standing relationship with Anil who has visited Vishnuprayag (close to Jaypee's hydro project) more than 10 times in past one decade. Anil had always shown interest, even when our talks with TAQA were on. In the past 10 days, we realised that TAQA was backing off. The asset was on the block and everyone knew it. There was a good interest from Indian companies and they were willing to take a decision very quickly."

Gaur sees more business prospects with the Anil Ambani group in the future. "The way discussions led by Jaiprakash reached to logical conclusion in short period, I believe that this transaction will pave path for long associations for both the groups in future," he said. He said the group's focus on hydropower would continue. "Jaypee Group is known world over for making best hydro plants and we will continue to build the same."

"Even after growing at CAGR of over 40 Percent  for five years in terms of revenues and profitability, Jaypee Infratech's share price just did not show any promise. Company owns 6,000 acres of land parcel for development, out of which 3,000 acres is in NCR. But it didn't have impact on share price."

Source-On Request