Introduction
A Thermal Power Plant in India, operating for over 28 years, has an installed capacity of 500 MW, strategically located with efficient access to fuel and transmission infrastructure.
Situation:
Consistently operating at full capacity, regular maintenance, and upgrades conducted. Primarily coal-fueled with reliable supply contracts. Measures implemented for operational efficiency and emission reduction.
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Key Questions:
- Will the Plant continue operating?
- Will there be profit or positive revenue?
- Are alternative power plants more economical?
- Decision to Buy, sell, or hold?
Answers:
- Continuous demand due to the Plant’s monopoly in the region.
- 100% market share with no competition.
- Well-maintained plant, expected to remain operational.
- Positive revenue indicated by Discounted Cash Flow (DCF).
- Outperforming similar plants in capacity, efficiency, and financial performance.
Conclusion:
This Case Study provides a comprehensive framework for evaluating the Thermal Power Plant’s Valuation, considering operational, financial, and market factors.
Read More: Valuation of an under-construction commercial project by Discounted Cash Flow (DCF)