GE Power India Ltd will be buying out the full equity stake held by GE Power Systems GmbH in NTPC GE Power Services Pvt Ltd. This will make NGSL a fully domestic company with no foreign partners.
In a stock exchange filing, GE Power India Ltd (GPIL) said that it would be acquiring the 50 per cent stake of GE Power Systems GmbH held in NTPC GE Power Services Pvt Ltd (NGSL), for a consideration of Rs.7.20 crore. The transaction is expected to close tentatively by April 30, 2021.
Background
NGSL was incorporated in September 1999 as a 50:50 joint venture between NTPC and GE Power Systems GmbH. NGSL is engaged in the renovation and modernization of existing power plants with primary focus on thermal power plants, and has also, inter-alia, ventured into supply, installation and subsequent operation & maintenance of thermal power plants.
Indian company
After the acquisition, NGSL will become a 50:50 joint venture between two domestic partners — NTPC and GE Power India Ltd.
Rationale
Though the notification by GE Power India Ltd did not mention the rationale behind this acquisition, it is believed that this development follows parent company GE’s decision to exit the new coal build business globally. However, the Indian arm GE Power India Ltd will continue to be associated with coal-based power plants. (Read more).
Outcome
Upon completion of the acquisition of shares from GE Power Systems GmbH, GE Power India Ltd (GPIL) would enter into renovation and modernization of thermal power plants segment and partner with NTPC, a pioneer in thermal power plants. This investment and JV with NTPC is expected to strengthen GPIL’s portfolio and open avenues for expanded scope of business for future projects, GE Power India said in the stock exchange filing.
Sales performance
The sales performance of NTPC GE Power Services Pvt Ltd, over the past three financial years was: Rs.62.75 crore (FY18), Rs.231.09 crore (FY19) and Rs.102.65 crore (FY20).
Featured photograph showing NTPC’s Rihand power plant in Uttar Pradesh is for illustration only.
