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NHPC Stocks Surged 2% on Signing a SJVA with Partner Companies

NHPC expects that the transaction will have no significant impact on its operations.

The shares of NHPC Ltd, a state-owned company, traded 2% higher when the company signed a Supplementary Joint Venture Agreement (SJVA) with its partners including NTPC, PowerGrid, Damodar Valley Corporation, Central Power Research Institute, and NHPTL itself. NHPC currently holds a 20% share in NHPTL. 

After the sale, PowerGrid will hold 50% of the equity shareholding in NHPTL, while the remaining 50% will be held equally by the other four parties, namely NHPC, NTPC, DVC, and CPRI, each holding 12.5%. 

Before the agreement, each promoter held a 20% equity stake in NHPTL. Post-completion of the sale, NHPTL will no longer be an associate company of NHPC Ltd.

NHPC is selling part of its stake in National High Power Test Laboratory Pvt Ltd (NHPTL).

As per the terms of the agreement, NHPC will sell 1,31,63,750 shares to PowerGrid Corporation of India Ltd (PGCIL) at a notional total consideration of Rs 1 per share. 

PGCIL, an existing promoter of NHPTL, is a Schedule ‘A’ and ‘Maharatna’ Public Sector Enterprise under the Ministry of Power, known for its pivotal role in bulk power transmission across India.

The sale is exempt from being categorised as a related party transaction since it involves government entities. NHPC expects that the transaction will have no significant impact on its operations. 

As of March 31, 2023, the total revenue of NHPTL was Rs 2,023.11 lakh, while its net worth was negative Rs 18953.15 lakh during the same period. 

The sale of the stake in NHPTL is expected to be completed in the fiscal year 2024-2025.

At 3:30 pm, the shares of NHPC Ltd. closed flat at Rs 90.15 on NSE.

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