NHPC Transfers 1 Cr Shares to Power Grid Corp, Reduces Stake in NHPTL

In a regulatory filing, the National Hydroelectric Power Corporation(NHPC), informed the exchange platforms about the completion of the sale of a partial stake in National High Power Test Laboratory Pvt. Ltd.(NHPTL) This happened based on the Board Meeting held on 10th June 2024, who approved the transfer of 1.31 Cr shares from NHPC to Power Grid Corporation of India Ltd. 

This approval aligns with the Supplementary JV Agreement signed between JV partners of NHPTL. This post-transaction equity holding of NHPC in NHPTL has now dialed down from 20% to 12.5%. Thus, NHPTL ceased to be an Associate Company of NHPC Limited.

Past filing:

This filing came as a continuation of its previous letter dated 23.04.2024. On that day, NHPC signed the Supplementary JV Agreement with JV partners of NHPTL to sell a partial stake in NHPTL. The Joint venture of NHPTL included companies like NTPC (National Thermal Power Corporation), POWERGRID, DVC(Damodar Valley Corporation), CRPI (Central Power Research Institute), NHPC, etc. The objective of the JV is to establish an online high-power circuit test facility, an independent testing facility in India.

What caused this?

This agreement came into action based on the revival plan that was agreed upon by the Ministry of Power based on the financial crisis of NHPTL and for the long-term sustenance of this important testing facility for high-voltage transformers in the country. The revival plan comprised equity transactions between shareholders with an outcome of revised equity holding of POWERGRID in NHPTL as 50% and the remaining to be held by all 4 JV partners (NHPC, NTPC, DVC, and CPRI) for 12.5% each.

Conclusion: With the help of this joint venture agreement, the board composition will now include 2 directors from POWERGRID including the chairman of NHPTL, and one nominee director from other promoters on a rotational basis. The share price of NHPC Ltd. also saw a 0.41% increase and closed at Rs.102.40 on Tuesday.

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