Reliance Infrastructure Solidify Manpower Service Portfolio Via UPL Stake Acquisition

Reliance Infrastructure Limited (RIL), a leading Indian infrastructure company, announced a strategic move to bolster its manpower service offerings. Through its wholly-owned subsidiary, Reliance Velocity Limited (RVL), RIL has entered into an agreement to acquire a significant stake in Utility Powertech Limited (UPL).

Expanding Reach in Manpower Services

The acquisition signifies RIL’s commitment to expanding its presence within the manpower services sector. UPL, currently a joint venture between RIL and National Thermal Power Corporation Limited (NTPC), offers a comprehensive range of manpower solutions catering to construction and operation and maintenance (O&M) activities in the power and related sectors. With the acquisition, UPL will become an associate company of RIL, solidifying Reliance Infrastructure’s position as a key player in this growing market.

Streamlined Structure and Efficient Completion

The transaction structure leverages RIL’s wholly-owned subsidiary, RVL, to acquire the stake in UPL. This streamlined approach ensures smooth execution and simplifies the overall process. Furthermore, the acquisition is expected to be completed by May 30, 2024, signifying a swift and efficient implementation timeline.

Consideration and Financial Performance

The agreement entails a cash consideration of Rs 66.44 crore, with each share acquired at a price of ₹550. UPL boasts a consistent track record of financial performance, having recorded turnovers of ₹1,406.37 crore, ₹1,593.85 crore, and ₹1,619.79 crore for Financial Years 2021, 2022, and 2023, respectively. This steady growth trajectory underscores the value UPL brings to RIL’s portfolio.

Looking Ahead

The acquisition of a stake in UPL presents a strategic opportunity for Reliance Infrastructure. By leveraging UPL’s established expertise and extensive network, RIL can further strengthen its manpower service offerings and cater to a broader range of clients within the power sector and related industries. This strategic move positions RIL for continued growth within the infrastructure sector, enabling the company to deliver comprehensive solutions across its diverse service portfolio.

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.