POWERGRID Expands Transmission Network with Khavda IV-E2 Power Transmission Limited Acquisition

On May 30, 2024, Power Grid Corporation of India Limited informed in a stock exchange filing that having been selected as the successful bidder under tariff-based competitive bidding, the company acquired Khavda IV-E2 Power Transmission Limited (KIVE2TL).

This Project SPV will establish the Transmission System for Evacuation of Power from the potential renewable energy zone in the Khavda area of Gujarat under Phase-IV (7GW) Part E2. The project will be executed on a build, own, operate, and transfer (BOOT) basis, coordinated by REC Power Development and Consultancy Limited.

About the Acquired Entity

Khavda IV-E2 Power Transmission Limited is engaged in power transmission, similar to Power Grid Corporation of India’s business.

Khavda IV-E2 Power Transmission Limited was incorporated on October 5, 2023, by the Bid Process Coordinator as per the Guidelines Encouraging Competition in the Development of Transmission Projects and Tariff-based Competitive-bidding Guidelines for Transmission Services notified by the Ministry of Power (MoP).

Khavda IV-E2 Power Transmission Limited is yet to start commercial operation and will be operating in India.

Details of the Acquisition

The company stated that the Bid Process Coordinator obtained the requisite approvals for the transfer of Khavda IV-E2 Power Transmission Limited. After being acquired by Power Grid Corporation of India Limited, Khavda IV-E2 Power Transmission Limited must seek approvals from the Central Electricity Regulatory Commission for the grant of a transmission license and the adoption of transmission charges.

The acquisition of KIVE2TL amounted to approximately ₹7.72 crore, including 50,000 equity shares valued at ₹10 each, along with the assets and liabilities as of the acquisition date (May 30, 2024). However, the acquisition price may be adjusted based on the company’s audited accounts as of the acquisition date.

About Power Grid Corporation of India Limited

Power Grid Corporation of India Limited is a Schedule ‘A’, ‘Maharatna’ PSU established on Oct 23, 1989, under the Companies Act, 1956. It is a major player in power transmission, and the Government of India has a 51.34% stake in the company. Power Grid Corporation of India Limited mainly focuses on transmitting power via its extensive EHVAC/HVDC network. Leveraging its national transmission infrastructure, the company ventured into the telecom sector with OPGW technology. Additionally, it offers consultancy services in power transmission, sub-transmission, distribution management, load dispatch, and communication.

On May 31, 2024, the share price of Power Grid Corporation of India Ltd opened at ₹308.55, touching the day’s high at ₹311.05, as of 10:44 AM on the NSE.

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