Good morning my dear friends,

Wishing you all a very Happy Republic Day and a Super long weekend ahead.

I am planning to watch the movie 'King Richard' at night, the story of Venus and Serena Williams and the role played by their Dad, Richard. I believe its on Amazon Prime, as per Google.

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The Revolution in Renewables in India.

In short, the world needs a lot of Electricity and Fossil fuels aren't going to cut it.

*Whatever I may say below, please verify the data at your end too. I do not take stock names, but still, verify everything.

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India needs to get to 700 GW of Generation.

The Govt has set a target of adding 3 GW per month, we are able to add just 1 GW per month.

So while we need 36 GW annually, we are adding 12 GW currently.

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And as Fossil based generation get phased out over the next 30-40-50 years, not only do we need to add generation capacity to meet fresh power demand, we need additional generation to even replace fossil based generation over the coming decades.

This is a BIG ASK.

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Renewables are the only answer, which will be led by Solar.

(It is only my opinion, I could ofcourse be wrong. I have been wrong in the past, I could be wrong again).

I am not my wife, to be always right. - Dont laugh, your wife is ALSO always right =)

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The rise of AI, Super Computers & EV, among others, have led to a huge surge in power demand and this is only going to increase, significantly over the coming decades.

AI especially, the Data Centers which support AI, require significant sums of electricity.

The AI boom could require a shocking amount of electricity actually.

Some facts, in 2022, Data Centers that power all computers used up 1.3% of the world's electricity. This excludes Crypto Currency mining, which used up another 0.4%.

So thats 1.7% of the world's entire generation, out of the blue.

World's not ready for it and definitely there is going to be a scramble, world over towards adding renewable energy capacity, led by Solar.

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In a nutshell, 400-500 GW of Electricity is needed, we are adding 12 GW annually. Hence, it really is a big opportunity for the players involved in this space.

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By the way, In contrast, China is adding 150 GW annually (need to verify this).

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I also feel, in the slip stream of Renewables, will come the entire ancillary space, transmission lines will need to be built, all kind of critical parts will need to be manufactured in India etc.

It is a big opportunity across the board.

Mind you, its a very average business because ROIC is not too high, entry barriers dont exist but what makes it interesting is that this cycle seems very strong.

This is not as compelling as the Food or Wealth/Asset management sector on the RoIC, ROE front, but it is a big trend which we need to acknowledge.

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At Negen, our endeavour is to find ideas in this sector in the unlisted / private market space so that we can satisfy the valuation criteria.

Because, the listed renewable stocks are just way to expensive now.

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That is all from me today my friends.

Please excuse my grammar or spelling mistakes today, my eyes are closed but somehow my hands are typing 😅.

By the way, we are evaluating an unlisted company operating in the very interesting area of Automated Parking Solutions.

I think Parking is as big a problem as Electricity Generation =)

My Best,

Neil Bahal

Founder (Trying to find actually)

Negen Capital

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