India’s biggest player in the power metering solutions sector, with a 27 percent market share, hit a 20 percent upper circuit in the first half session on Wednesday, reaching an all-time high price of Rs 169.05.
The stock rose after the company signed a $2 billion agreement with Gem View Investments to set up a platform to fund smart metering projects. At 2:20 p.m, Genus Power Infrastructures shares were trading at Rs 165, up 17.4 percent on the NSE.
As per exchange filings, Genus Power Infrastructures Ltd signed definitive contracts with Singapore sovereign wealth fund, Gem View Investment Pte Ltd(GIC) to establish a platform for providing Advanced Metering Infrastructure Service Provider concessions.
Gem Investment will own 74% of the Platform, while Genus Power will own 26%. The partners have committed to a $2 billion first pipeline investment.
GIC will also invest Rs 519 crore through its Chiswick Investment in Genus Power through a preferential warrant issue. On a fully diluted/as-converted basis, this investment will represent 15% of Genus Power’s paid-up share capital. As part of the agreement, Genus Power will be the platform’s sole supplier of smart metres and related services.
Genus Power Infrastructures Ltd provides engineering and construction companies with a range of smart metering solutions. Private utilities and state power boards are the company’s main clients.
The Indian government intends to implement the National Smart Metering Project under the Revamped Distribution Sector Scheme (RDSS), with a goal of installing 25 crore metres by 2025 and an estimated $30 billion expenditure. With technical and commercial losses surpassing 15% for all major Indian utilities, resulting in significant financial losses, smart metering projects under the RDSS plan to decrease such losses, increase operational efficiency, and improve financial sustainability.
As per the report, Genus Power will be the exclusive supplier to the platform for smart metres and associated services. In order to meet demand, the company is investing extensively.
The stock has risen 94 percent in the previous six weeks, ranging from Rs 86.35, and gained a multibagger return of 127.80 percent last year.
Financially, revenue climbed by 18% year on year, rising from Rs 685 crore in FY 21-22 to Rs 808 crore in FY 22-23. Similarly, net profit fell by half, from Rs 58 crore to Rs 29 crore.
Written by Omkar Chitnis
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