During Thursday’s trading session, the shares of India’s largest electric power transmission company surged 2.5 percent to Rs. 322.85 on BSE, after the company announced acquiring Khavda V-A Power Transmission Limited for nearly Rs. 18.95 crores.
With a market cap of Rs. 3 lakh crores, at 01:40 p.m., the shares of Power Grid Corporation of India Limited were trading in the green at Rs. 322.8, up by nearly 2.5 percent, as against its previous closing price of Rs. 315.05.
What’s the news:
Power Grid Corporation of India Limited acquired Khavda V-A Power Transmission Limited (KVAPTL) from the Bid Process Coordinator, REC Power Development and Consultancy Limited (RECPDCL).
The project involves the establishment of 6000 MW, ±800 kV HVDC terminal stations at KPS2 in Gujarat, Nagpur and in Maharashtra, along with a ±800 kV HVDC KPS2 – Nagpur Bipole line (~1200 km), crossing Gujarat and Maharashtra.
Additionally, it includes the LILO of Wardha – Raipur 765 kV D/C line at Nagpur and the necessary interconnections and equipment at the terminal stations. KVAPTL was acquired by Power Grid Corporation after emerging as the successful bidder under the Tariff-Based Competitive Bidding process.
About the Target Entity:
KVAPTL is the project Special Purpose Vehicle (SPV) responsible for establishing a transmission system for the evacuation of power from a potential renewable energy zone in the Khavda area of Gujarat, on a build, own, operate and transfer (BOOT) basis.
Incorporated in October 2023 by the Bid Process Coordinator, KVAPTL is involved in the business of power transmission. The acquisition of KVAPTL by Power Grid Corporation was completed for a total value of ~Rs. 18.95 crore, which includes 50,000 equity shares at a face value of Rs. 10 each, along with the company’s assets and liabilities.
The total cost of the Khavda project is more than Rs. 24,000 crores, which will cover the terminals at Khavda and Nagpur, and about 65-70 percent of this amount will be allocated to the terminals, while around 35 percent will be spent on the transmission line.
Previous News:
On 11th November, Power Grid Corporation acquired Bikaner B Power Transmission Limited (BBTL) from the Bid Process Coordinator, REC Power Development and Consultancy.
BBTPL is the Project SPV to establish a transmission system for evacuation of power from Rajasthan, on a BOOT basis, and was acquired by Power Grid for an aggregate value of about Rs. 18.47 crores.
The project involves the development of a new 765/400kV Siwani sub-station, complete with STATCOM and other equipment, along with a 765kV D/C Transmission Line that spans Rajasthan and Haryana.
Additionally, the project includes several 400kV D/C transmission lines passing through Haryana and the extension of bays at existing substations in both Rajasthan and Haryana to accommodate these lines.
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Financials:
The company reported a marginal growth in revenue from operations, experiencing a quarter-on-quarter increase of nearly 2.5 percent, rising from Rs. 11,006 crores in Q1 FY25 to Rs. 11,278 crores in Q2 FY25.
Similarly, during the same period, the company’s net profit increased from Rs. 3,724 crores to Rs. 3,793 crores, representing a marginal rise of around 2 percent QoQ.
Key Financial Ratios:
In terms of key financial metrics, Power Grid Corporation of India has a Return on Equity (RoE) of 19 percent and a return on capital employed (RoCE) of 13.2 percent. Additionally, the company’s debt-to-equity ratio stands at 1.33.
Stock Performance:
The stock has delivered positive returns of nearly 54 percent in one year, while around 1.3 percent of negative returns in the last six months. So far in 2024, the shares of Power Grid Corporation of India have given positive returns of about 35.2 percent.
About the company:
Incorporated in 1989, Power Grid Corporation of India Limited is principally engaged in the implementation, operation and maintenance (O&M) of Inter-State Transmission Systems (ISTS), Telecom and consultancy services. Government of India (GoI) holds a 51.34 percent stake in the company as of September 2024 shareholding pattern.
Written by Shivani Singh
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