NHPC signs JV agreement with PowerGrid for stake sale in subsidiary, shares extend gains for third day

Shares of NHPC Ltd closed higher on Wednesday, April 23, extending the gains for the third straight session a day after the state-owned company announced signing a supplementary joint venture agreement (JVA) for selling a partial stake in the National High Power Test Laboratory (NHPTL).

NHPC Ltd shares gained as much as 1.61% to hit an intraday high of ₹91.2 apiece on the NSE following the announcement about the JVA with PowerGrid Corporation of India Ltd. However, the PSU stock pared early gains to close at ₹90.15 apiece, up 0.45%, on the NSE.

The Central public sector undertaking, in a stock exchange filing on Tuesday, April 23, informed about signing of a supplementary JV agreement with its JV Partners of National High Power Test Laboratory Pvt. Ltd. (NHPTL), which include NTPC, PowerGrid, DVC, CPRI and NHPTL.

This agreement pertains to the sale of a partial stake in NHPTL, an unlisted company.

Following the sale, the revised equity shareholding of PowerGrid in NHPTL will stand at 50%, with the remaining 50% equity to be equally distributed among the other four stakeholders — NHPC, NTPC, DVC, and CPRI — each owning 12.5%.

Prior to signing the supplementary JV agreement-3, each promoter held a 20% equity stake. Upon completion of the transaction, NHPTL will no longer be considered an associate company of NHPC Limited.

The completion date for the sale is expected to be within the fiscal year 2024-2025. The consideration received from the sale involves 1.31 crore shares from NHPC, with a notional total consideration of Re 1.

As of now, NHPC holds a 20% share in NHPTL. The filing added that the buyer, PowerGrid Corporation, is an existing promoter of NHPTL. PGCIL is a Schedule ‘A’ and ‘Maharatna’ Public Sector Enterprise under the Ministry of Power.

NHPTL was established with an aim of creating an advanced, independent and internationally recognised on-line high power short circuit test facility in India. This facility will cater to national and international power equipment manufacturers, as well as power utilities from SAARC, ASEAN, and Middle East countries.