Nuclear power: Tata Power, JSW Energy clear first step; buy shares, says JM Financial

Adani Power, Hindalco Industries, Jindal Steel, JSW Energy, Reliance Industries, and Tata Power have completed the first formal requirement in the process of setting up nuclear power projects for captive use. The six companies have submitted the necessary documents to the Nuclear Power Corporation of India Limited (NPCIL) for signing Non-Disclosure Agreements (NDAs), which mark the initial step in participating in the Bharat Small Reactors (BSRs) programme.

Among its coverage stocks, JM Financial maintained its Buy rating Tata Power and JSW Energy both companies, with a target price of Rs 726 for JSW Energy and Rs 436 for Tata Power, highlighting the strategic long-term benefits of their involvement in India’s nuclear energy programme.

JM Financial said the BSR initiative is a strategic move by NPCIL to involve the private sector in nuclear energy generation. In December 2024, NPCIL had issued a Request for Proposals (RFP), inviting Indian industries to participate in the establishment of 220 MW Bharat Small Reactors for captive power generation. These reactors are compact versions of Pressurized Heavy Water Reactors (PHWRs), designed to provide reliable, low-carbon power solutions to industries with high energy requirements, it said adding that the initiative is aimed at helping energy-intensive sectors transition towards sustainable operations and lower their carbon footprint.

Each BSR, with a planned capacity of 220 MW, is tailored to meet the captive power needs of industrial units. By reducing reliance on conventional fossil-fuel-based power, the reactors are expected to improve energy security, enhance efficiency, and accelerate decarbonization efforts. Importantly, these reactors will be developed with private sector investment, within India’s existing legal and regulatory framework, and in line with approved business models for nuclear energy participation, JM Financial said.

Along with filing documents for NDAs, the six companies have also identified possible locations for installing BSRs. Preliminary site reports have been submitted for 16 sites spread across six states. Gujarat accounts for the largest share with five sites, followed by Madhya Pradesh with four, Odisha with three, Andhra Pradesh with two, and one site each in Jharkhand and Chhattisgarh.

To facilitate progress, NPCIL has written to the state governments of Gujarat, Madhya Pradesh, and Odisha. It has sought their support in conducting site investigations and in allocating essential resources such as land and water, which are critical for the development of nuclear