NTPC eyes Cen­tre’s stake in SJVN to boost non-ther­mal port­fo­lio

In dis­cus­sions with Hi­machal Pradesh gov­ern­ment

The Hindu Business Line - - NEWS - TWESH MISHRA

The Cen­tre is us­ing its per­sua­sive skills to make the Hi­machal Pradesh gov­ern­ment agree to a deal be­tween Cen­tral pub­lic sec­tor en­ter­prise NTPC and SJVN Ltd.

NTPC’s ac­qui­si­tion of SJVN will pro­pel the gov­ern­ment closer to its ₹80,000-crore dis­in­vest­ment tar­get. NTPC’s ac­qui­si­tion of the Cen­tre’s stake in SJVN will be in line with the ob­jec­tive of in­creas­ing the non­ther­mal as­set base of the coun­try’s largest power pro­ducer.

Ac­cord­ing to a com­pany of­fi­cial, NTPC will even­tu­ally want to merge with SJVN and fur­ther boost its non-ther­mal port­fo­lio. But for now, the fo­cus will be on just buy­ing out the stake.

But the State gov­ern­ment has problems with the merger. SJVN is a ‘Mini Ratna’ pub­lic sec­tor un­der­tak­ing un­der the ad­min­is­tra­tive control of the Min­istry In­di­ca­tions from the gov­ern­ment favour a buy­out of the Cen­tre’s stake be­fore the end of the cur­rent fi­nan­cial year

of Power. The com­pany was in­cor­po­rated on May 24, 1988, as a joint ven­ture be­tween the Gov­ern­ment of In­dia and the Gov­ern­ment of Hi­machal Pradesh.

SJVN is a listed com­pany with 63.79 per cent share­hold­ing held by the In­dian gov­ern­ment. The State gov­ern­ment has a 26.85 per cent stake and the rest (9.37 per cent) is held by the pub­lic. The cur­rent net­worth of the com­pany is ₹10,694.71 crore.

The dis­in­vest­ment moolah

NTPC presently has 21 sub­sidiaries and SJVN will be its 22nd sub­sidiary if the trans­ac­tion goes

through. How­ever, NTPC is clear that it will like to take man­age­ment control.

The Cen­tre has so far mopped up over ₹32,000 crore through dis­in­vest­ment. The pro­posed ac­qui­si­tion of Ru­ral Elec­tri­fi­ca­tion Cor­po­ra­tion by Power Fi­nance Cor­po­ra­tion an­nounced on Thurs­day is also ex­pected to add an­other ₹15,000 crore to the cof­fers.

In­di­ca­tions from the gov­ern­ment favour a buy­out of the Cen­tre’s stake be­fore the end of the cur­rent fi­nan­cial year.

“SJVN mainly has hy­dropower as­sets and we would like to di­ver­sify across the power gen­er­a­tion value chain,” a top NTPC of­fi­cial told Busi­nessLine.

At Fri­day’s share price and mar­ket cap­i­tal­i­sa­tion, NTPC will have to shell out at least ₹6,605.46 crore for a stake buy­out. NTPC ex­pects to fi­nance the ac­qui­si­tion through bor­row­ings from banks, the of­fi­cial said.

En­ergy mix

“There is an en­ergy tran­si­tion un­der way and the per­cent­age share of coal-based power gen­er­a­tion will have to come down in the over­all en­ergy mix. Af­ter the ac­qui­si­tion, we will be­come the owners of SJVN and the com­pany will be a sub­sidiary of NTPC,” the NTPC of­fi­cial said.

NTPC cur­rently has a to­tal in­stalled ca­pac­ity of 52,946 MW, while SJVN has an in­stalled ca­pac­ity of 2,003.2 MW.

“NTPC aims to more than dou­ble its ex­ist­ing power gen­er­a­tion ca­pac­ity and be­come a 130-GW com­pany by 2030. Our fo­cus will be on ex­pan­sion through brown-field ac­qui­si­tion,” the NTPC of­fi­cial said.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.