CESC shares rally over 6% on acquiring 63.91% stake in Purvah Green Power; check details

The electricity generation and distribution company acquired a total of 63.91% equity shares of Purvah Green Power Private Ltd, thus making the latter a direct subsidiary of CESC Ltd.

Purvah Green Power was a wholly-owned subsidiary of Crescent Power Ltd, which is, in turn, a subsidiary of CESC. Following the aforestated acquisition, which was conducted on an arm’s length basis, Purvah Green Power has now become a direct subsidiary of CESC.

The company informed the bourses that it acquired 63.91% of Purvah 's shares by subscribing to 20.5 crore of its equity shares of ₹10 each, taking the aggregate consideration of the deal to ₹205 crore. The acquisition was completed on Monday, July 29, 2024.

Purvah Green Power began operations on December 21, 2023, in West Bengal. It focuses on the generation, trading, and dealing in electrical energy using renewable energy sources. The acquisition was conducted so that CESC can expand in the renewable energy business.

Shares of the company traded 4.1% higher at ₹173 per piece on the NSE at 11:30 am on Tuesday, July 30.

The Kolkata-headquartered company’s stock hit a 52-week high of ₹192.7 per share on July 12, 2024, and has given impressive returns to its shareholders on a short-term and long-term basis. It has gained 7% in a month and is up more than 31% so far this year. Over the last year, CESC’s shares have skyrocketed 131%.

The company will conduct its 46th Annual General Meeting (AGM) next month on August 21, 2024.

In the financial year 2023-24, CESC reported a decent 7% year-on-year (YoY) rise in total income at ₹8,728.64 crore compared to ₹8,153.33 crore observed in the previous financial year. However, its profit for the year dipped 6.7% to ₹774.87 crore from ₹830.33 crore earlier as it reported a loss before regulatory income and tax of ₹574.43 crore as against a profit figure of ₹272.56 crore in FY23.