NHPC, India’s largest hydropower company, is keen to buy its public sector co-promoter, power trading company PTC India, three people familiar with the plan said.
Union power ministry officials are likely to discuss the PTC India stake sale on Friday, one of the three people said, requesting anonymity. They are planning to have a meeting.
Currently, NHPC, NTPC Ltd, Power Grid Corp. of India Ltd, and Power Finance Corp. Ltd hold approximately 4.05% each in PTC India, for a total of 16.2%. The four PSUs had appointed ICICI Securities as the merchant banker for the transaction in 2022 after the power ministry approved the exit plan.
“Both companies have been looking to exit for some time and plan to carry out a share sale by the end of this year,” added the person quoted above.
Email inquiries to NHPC, NTPC, PowerGrid, and PFC did not elicit any response.
Acquiring PTC India would increase NHPC’s power trading share, as it already has a license for this purpose. The move could also help as NHPC is involved in hydropower projects in Nepal and Bhutan that export electricity to India. NHPC having its own power trading company will enable efficient trading and supply of green power.
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However, NHPC has no intention of acquiring PTC India Financial Services (PFS), the controversial financial arm of PTC India, the people said. Both PTC India and PFS have come under intense regulatory scrutiny over issues of corporate misgovernance and greening of loans by PFS.
A PTC India spokesperson said the company is not aware of any developments regarding the share sale.
“The following information pertains to the investment in PTC India by our promoters. They have been promoters of PTC since its inception. Since the listing of the company, the subsequent QIPs have collectively held 16.20% of the company. There is.”
PTC India is a dividend paying company even before listing and the promoters have a total of INRSince the investment, the company has received 320 million yen in dividends, the spokesperson added. “Divestitures/integrations or activities or arrangements may be part of investment prospects (either singly or jointly) of which the entity is not aware.”
There was a reconsideration within the government regarding the sale of shares in 2023, but talks have accelerated in recent months.
Also read | PTC CMD, former PFS MD barred from board of directors and listed company management
“Within the company (NHPC), PTC India The idea is that its core trading business has generally been doing well and has been creating value for investors over the years, and its dividend stream has been fairly consistent, so if other promoters want to exit. Large water power It would be better not to quit the entire company.However, considering that the promoter’s stake is only about 16%, not a majority stake, it cannot be called a strategic investment. ” said a second official.
PTC India is one of India’s largest power trading companies. NTPC also has another power trading arm called NTPC Vidyut Vyapar Nigam Ltd.
PTC India and its subsidiary PFS have been in the news after several PFS directors resigned in February 2022 alleging misgovernance in the company. In June, the Securities and Exchange Board of India suspended Rajiv Kumar Mishra, former chairman of PTC India, and Pawan Singh, former managing director of PFS, from directors of listed companies, respectively, over allegations of corporate governance fraud. He was prohibited from holding any corporate or management positions for six months and two years. At PFS. The market regulator also imposed the following penalties: INR1 million and INR2.5 million each for Mishra and Singh.
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However, the Securities Appellate Tribunal (SAT) last month set aside the Sebi order barring Mishra from being a director of a listed company. Mishra had approached SAT on the ground that he was not in charge of PFS.
Following this, the PTC India Board of Directors held a meeting and decided that Mr. Mishra could not serve as a director or CMD of the company.
On Thursday, PTC India stock fell 3.93%; INRThe benchmark Sensex index fell 0.68% to 138.15. Its market capitalization is INR4,089,350,000.
