Highlights of the BID:
- Four companies, Adani Group, Tata Power, Greenko and JSW Energy, have expressed interest in purchasing stakes in PTC India.
- Five public sector undertakings, including four promoter firms, plan to sell their stakes in PTC India due to governance issues at a financial services subsidiary.
- The promoters of PTC India, including NTPC, NHPC, Power Finance Corporation and Power Grid Corp, hold a combined stake of around 16%. Damodar Valley Corp also intends to sell its 3.3% stake.
- A potential strategic investor may be offered around 20% of the business, with the Life Insurance Corporation of India not likely to sell its 5.96% stake.
- ICICI Securities has reached out to potential buyers and may seek interest from more entities to sell the stake in PTC India.
- Damodar Valley and the promoters will each appoint an internal committee to determine a floor price for the stake sale before proceeding, with an estimated time frame of 4-6 weeks.
- PTC India denied any knowledge of the stake sale by the promoter companies in a statement to the stock exchanges on January 12.
- PTC India’s shares rose by 5% on Tuesday, closing at Rs 95.90 on the BSE, giving it a market capitalization of Rs 2,839 crore. Nearly Rs 570 crore would be required to acquire 20% of PTC at this price.
Details of the BID:
Four companies, Adani Group, Tata Power, Greenko and JSW Energy, have expressed interest in purchasing stakes in PTC India , according to a report in the Economic Times.
Due to governance issues at a financial services subsidiary, five public sector undertakings, including four promoter firms, plan to sell their stakes in PTC India, the report states.
Promoters of PTC India, including NTPC, NHPC, Power Finance Corporation and Power Grid Corp, hold a combined stake of around 16%. Damodar Valley Corp, which holds a 3.3% stake, also intends to sell its shares.
A potential strategic investor may be offered around 20% of the business, according to sources cited by the Economic Times. The Life Insurance Corporation of India, another government-run shareholder, is not likely to sell its 5.96% stake.
ICICI Securities has reached out to potential buyers and may seek interest from more entities to sell the stake in PTC India, according to people familiar with the matter.
Damodar Valley and the promoters will each appoint an internal committee to determine a floor price for the stake sale before proceeding. They estimate that the floor price will be finalized within 4-6 weeks.
On January 12, PTC India denied any knowledge of the stake sale by the promoter companies in a statement to the stock exchanges.
PTC India’s shares rose by 5% on Tuesday, closing at Rs 95.90 on the BSE, giving it a market capitalization of Rs 2,839 crore. Nearly Rs 570 crore would be required to acquire 20% of PTC at this price.
Despite this, the promoters are expected to receive a significant premium on the stock, which has dropped after auditors revealed discrepancies in the financial reporting of companies Financial Services.
In the past year, the share price has fallen 15% since governance issues became public. PTC India has lost several independent directors, including former diplomat Preeti Saran, BSE chairman SS Mundra, former finance department secretary Sushama Nath, and Gokhale & Sathe founder Jayant Gokhale. Nath stated in her resignation letter that governance standards at PTC India had deteriorated since issues in its subsidiary surfaced.
Prakash S Mhaske was appointed as an independent director by the company on Tuesday. Mhaske recently retired as chairman of Central Electricity Authority.
PTC India was incorporated in 1999 and has been granted a Category-I license by the Central Electricity Regulatory Commission, allowing it to trade unlimited amounts of electricity. The company holds the largest share of the electricity trading market.
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