Power Grid Corporation of India Ltd (PGCIL) has sold its residual stake in four associate companies to Power Grid Infrastructure Investment Trust (PGInvIT).
In a stock exchange filing, PGCIL said that it has sold its entire 26 per cent stake in the following four associate companies:
- Powergrid Kala Amb Transmission Ltd (Rs.42.80 crore)
- Powergrid Parli Transmission Ltd (Rs.187.01 crore)
- Powergrid Warora Transmission Ltd (Rs.176.83 crore)
- Powergrid Jabalpur Transmission Ltd (Rs.100.44 crore)
The figures in brackets indicate the amount received by sale of stake in the individual entities.
The total consideration received after the transfer of stake, made on December 30, 2024, is around Rs.506.63 crore. This amount has been adjusted against adjustment of dividends received by PGCIL from these companies.
With these, these four entities cease to be associate companies of PGCIL, effective December 30, 2024. As a corollary, PGInvIT now holds 100 per cent equity in these four entities.
This sale of residual stake of 26 per cent in these four entities is being governed by the concerned share purchase agreements entered between PGCIL, IDBI Trusteeship Services Ltd, PUTL and the SPVs concerned, PGCIL said. PUTL or Powergrid Unchahar Transmission Ltd, a wholly-owned subsidiary of PGCIL, is the investment manager of PGInvIT.
Background
In May 2021, PGCIL monetized around Rs.2,736 crore by selling 74 per cent equity stake in five of its then wholly-owned subsidiaries – Powergrid Kala Amb Transmission Ltd, Powergrid Parli Transmission Ltd, Powergrid Warora Transmission Ltd, Powergrid Jabalpur Transmission Ltd and Powergrid Vizag Transmission Ltd – to PGInvIT.
In February 2022, the board of PGCIL approved the sale of the entire residual stake of 26 per cent in Powergrid Vizag Transmission Ltd to PGInvIT. The sale took effect on April 1, 2022, yielding PGCIL a sum of Rs.330.78 crore.
In this latest development, PGCIL has sold its entire residual stake in the remaining four entities. PGCIL therefore has no equity stake in the five aforementioned entities, which were collectively referred to as “Initial SPVs” in which 74 per cent stake was sold to PGInvIT when the InvIT came into existence in May 2021.
It may be mentioned that on April 1, 2022, PGCIL also received Rs.304.15 crore by way of relinquishing its rights on additional revenue accruing to Powergrid Parli Transmission Ltd, Powergrid Warora Transmission Ltd and Powergrid Jabalpur Transmission Ltd to PGInvIT.
PGCIL stake in PGInvIT
It may be carefully noted that even though PGCIL now does not have any equity stake in the five “Initial SPVs” that were originally its wholly-owned subsidiaries, PGCIL, as the sponsor of PGInvIT, at any point in time, will hold a minimum of 15 per cent of the total number of units issued by PGInvIT. When PGInvIT was formed, PGCIL was issued roughly 410 million units of PGInvIT, out of which around 136.5 million units, representing 15 per cent of the total units issued by PGInvIT, will always remain locked in.
Renaming of SPVs
As discussed above, on April 1, 2022, PGCIL sold its residual stake in Powergrid Vizag Transmission Ltd making it a wholly-owned entity of PGInvIT. After this transfer, the said SPV was renamed to “Vizag Transmission Ltd”. It is therefore very likely that in due course the four entities discussed in this story — Powergrid Kala Amb Transmission Ltd, Powergrid Parli Transmission Ltd, Powergrid Warora Transmission Ltd and Powergrid Jabalpur Transmission Ltd — will be accordingly renamed to reflect the dissociation from PGCIL (Powergrid).
PGInvIT portfolio
As of September 30, 2024, the five assets owned by PGInvIT entailed 11 transmission lines aggregating 3,699 ckm, three substations totaling 6,630 MVA and 1,956 ckm of OPGW. These five assets represent erstwhile TBCB subsidiaries of PGCIL that were fully operational when sold to PGInvIT.
Also read: PGCIL clinches two more ISTS-TBCB schemes — Gadag-Koppal and Kudankulam
