NHPC signs supplementary JV agreement to sell partial stake in NHPTL to Power Grid Corporation

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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State-owned NHPC Ltd on Tuesday (April 23) said it’s divesting its stake in National High Power Test Laboratory Pvt Ltd (NHPTL) by signing a supplementary joint venture agreement (SJVA) with its JV partners, including NTPC, PowerGrid, Damodar Valley Corporation, Central Power Research Institute and NHPTL itself.

“…it is to inform that NHPC Limited has signed a Supplementary JV Agreement with JV Partners of National High Power Test Laboratory Pvt. Ltd. (NHPTL) i.e. NTPC, POWERGRID, DVC, CPRI and NHPTL for the sale of a partial stake in NHPTL (an unlisted company) on 23.04.2024,” according to a stock exchange filing.

The agreement, finalised on April 23, 2024, marks the sale of a partial stake in NHPTL, an unlisted company, with an expected completion during the fiscal year 2024-2025.

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NHPC disclosed that the total revenue of NHPTL as of March 31, 2023, amounted to Rs 2023.11 lakh, while its net worth stood at a negative value of ₹18953.15 lakh during the same period. NHPC currently holds a 20% share in NHPTL.

As per the terms of the agreement, NHPC will sell 1,31,63,750 shares to PowerGrid Corporation of India Ltd (PGCIL) at a notional total consideration of ₹1. PGCIL, an existing promoter of NHPTL, is a Schedule ‘A’ and ‘Maharatna’ Public Sector Enterprise under the Ministry of Power, known for its pivotal role in bulk power transmission across India.

Following the transaction, the equity shareholding of PowerGrid in NHPTL will increase to 50%, while the remaining 50% will be held equally by the other four parties, namely NHPC, NTPC, DVC, and CPRI, each holding 12.5%. Before the agreement, each promoter held a 20% equity stake in NHPTL.

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The transaction, exempt from being categorised as a related party transaction due to the involvement of government entities, is anticipated to have no significant impact on NHPC Ltd. However, post-completion, NHPTL will cease to be an associate company of NHPC Ltd.

Shares of NHPC Ltd ended at ₹89.76, up by ₹1.21, or 1.37% on the BSE.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow