Tata Power Surges on Acquisition Plans: Set to Expand Transmission Portfolio

19 Feb 2024 , 10:25 AM

Tata Power shares saw a robust increase of nearly 2% upon market opening on the NSE, following the announcement by the power transmission and distribution giant regarding its intent to acquire the Jalpura Khurja Power Transmission project. As of 9:20 am, the stock was trading at ₹382.55, reflecting investor enthusiasm for the strategic move.

In a regulatory filing made after market hours on February 16, Tata Power disclosed the receipt of a Letter of Intent (LoI) from REC Power Development for the acquisition of the Jalpura Khurja Power Transmission project at a valuation of ₹838 Crore.

According to the filing, the project is slated to be developed on a build-own-operate-transfer basis, offering transmission services for 35 years from the scheduled date of commercial operation (SCOD), expected around 18 months following the acquisition by the Special Purpose Vehicle (SPV).

In its financial performance for Q3FY24, Tata Power reported a consolidated net profit of ₹1,076.12 Crore, marking an increase from ₹1,052.14 Crore in the previous fiscal year. The company attributed the rise in net profit to improved realizations across core business segments, including generation, transmission, distribution, and renewables. Consolidated revenue for the same period registered a growth of 6.2%, reaching ₹15,294.13 Crore, while earnings before interest, taxes, depreciation, and amortization (EBITDA) surged by 20% to ₹3,060.55 Crore from ₹2,607.61 Crore.