Power Stock's Bold Move: Sells 26 per cent Stake for Rs 506 Crore and Acquires Rs 18.37 Crore Transmission Project!

Major Stake Sale and Acquisition of Key Transmission Project Boost Future Growth Prospects

Power Grid Corporation of India Limited (POWERGRID) has transferred its 26 per cent residual equity shareholding in four of its associate companies—POWERGRID Kala Amb Transmission Ltd., POWERGRID Parli Transmission Ltd., POWERGRID Warora Transmission Ltd., and POWERGRID Jabalpur Transmission Ltd.—to its Infrastructure Investment Trust (PGInvIT) for a total consideration of Rs 506.63 crores. With this transfer, POWERGRID no longer holds any stake in these companies, which have ceased to be its associates as of December 30, 2024.

Acquisition of Rajasthan IV 4A Power Transmission Ltd.

In another key development, POWERGRID acquired Rajasthan IV 4A Power Transmission Ltd. under the Tariff Based Competitive Bidding (TBCB) route on December 30, 2024. The company has acquired 100 per cent control of RIV4APTL, which is tasked with the transmission of power in Rajasthan and Uttar Pradesh. The project, valued at Rs 18.37 crore, involves establishing a 765/400kV sub-station and transmission lines, and is expected to contribute significantly to POWERGRID’s growth in the renewable energy sector.

Financial Performance Overview: Steady Growth Despite Challenges

For the Q2FY25 period, POWERGRID reported a standalone income of Rs 11,383 crore, with a profit after tax (PAT) of Rs 3,711 crore. On a consolidated basis, the company’s income rose to Rs 11,846 crore, a 2.7 per cent YoY increase, while PAT remained steady at Rs 3,793 crore. Despite challenges in the market, including a Rs 100 crore loss from EESL, the company continues to see strong growth in revenue and profits, supported by its diverse portfolio of transmission projects.

Future Growth Outlook: Robust Pipeline and Investments

POWERGRID remains optimistic about its growth trajectory, with plans to invest Rs 18,000 crore in CapEx for FY24-25, with further growth anticipated. The company has secured multiple projects in Rajasthan, Gujarat, and other regions, contributing to a project pipeline worth Rs 1.43 lakh crore. Management is confident that the execution of these projects will propel the company towards achieving its long-term goals, supported by India’s increasing demand for power transmission and renewable energy expansion.

Sustainability and Technological Innovations

POWERGRID is also committed to sustainability, aiming to source 50 per cent of its electricity from renewable sources by 2025 and achieve net-zero emissions by 2047. The company is investing in cutting-edge transmission technologies such as HVDC and AC transmission systems, ensuring its position as a leader in the energy sector. With ongoing international consultancy projects, POWERGRID is well-positioned to expand its footprint globally.

Conclusion: Powergrid's Strategic Moves Show Growth Promise

The recent strategic moves, including stake sales and acquisitions, combined with strong financial performance and a robust pipeline of projects, position POWERGRID for long-term growth. With an emphasis on innovation, sustainability, and operational excellence, the company remains a cornerstone of India’s energy infrastructure.

Disclaimer: The article is for informational purposes only and not investment advice.