Power Grid Corporation of India Limited successfully acquired Rajasthan IV E Power Transmission Limited on August 19, 2024.
This acquisition, made through a competitive bidding process, is for a project to develop a new transmission system to handle power from the Rajasthan REZ Phase IV (Part 2: 5.5 GW) in the Jaisalmer/Barmer region. The project includes building a new 765 kV substation at Rishabhdeo, Rajasthan, along with 765 kV double-circuit transmission lines and associated upgrades at existing substations in Rajasthan and Madhya Pradesh. The target company, RIVEPTL, operates in the power transmission sector. Specific details about RIVEPTL’s size and turnover have not been disclosed.
This acquisition does not involve any related party transactions. Before the acquisition, POWERGRID had no prior interest in RIVEPTL, ensuring that the transaction was conducted at “arm’s length.”
Rajasthan IV E Power Transmission Limited (RIVEPTL) was established on October 14, 2023, following guidelines from the Ministry of Power for competitive transmission projects. The Bid Process Coordinator obtained the necessary approvals for transferring RIVEPTL. After POWERGRID’s acquisition, RIVEPTL will need to secure additional approvals for a transmission license and the adoption of transmission charges from the Central Electricity Regulatory Commission.
The acquisition was made following POWERGRID’s success in a tariff-based competitive bidding process. RIVEPTL’s business is directly aligned with POWERGRID’s core activities in power transmission, making this acquisition a strategic fit for expanding its operations in the same industry.
Consideration and Cost: The acquisition was made through a cash payment totalling approximately ₹18.54 crore. This includes 50,000 equity shares valued at ₹10 each, along with the company’s assets and liabilities as of August 19, 2024. The final price may be adjusted based on audited accounts.
Shareholding and Control: POWERGRID acquired 100% of the shares in RIVEPTL.
Power Grid Corporation of India is a major public sector enterprise and India’s leading electric power transmission company. As of March 31, 2021, the Government of India owns 51.34% of PGCIL. Founded in 1989, PGCIL focuses on setting up high-voltage alternating current and high-voltage direct current (HVDC) transmission lines.
On August 20, 2024, the share price of Power Grid Corporation of India Ltd opened at ₹340.45, touching the day’s high of ₹342.65 as of 10:23 AM on NSE.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
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