Tata Group stock primarily involved in the business of generation, transmission, and distribution of electricity and many more, in focus upon receiving a Letter of Intent from Power Finance Corporation Limited’s subsidiary to acquire an SPV.
Price Action
With a market capitalization of Rs. 1,40,308 Crores, the shares of Tata Power Limited were trading at Rs. 439.10 per equity share, down 5 percent from its previous day’s close price of Rs. 460.30.
What Happened
Tata Power Limited has received a Letter of Intent from Power Finance Corporation Limited’s wholly owned subsidiary PFC Consulting Limited to acquire Paradeep Transmission Limited, a project special purpose vehicle (SPV).
The scope of work involves constructing a 2 x 1500 MVA, 765/ 400 kV GIS substation at Paradeep with associated bays at Angul and Paradeep (OPTCL), ~190 km of 765 kV double circuit transmission line from the existing Angul substation of PGCIL to the proposed 765 kV GIS substation at Paradeep and ~12 km of 400 kV line from existing OPTCL substation at Paradeep to the proposed 765 kV GIS substation at Paradeep
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The Project SPV (Paradeep Transmission Limited) would be developed on a Build-OwnOperate Transfer basis, at annual transmission charges of Rs. 256.18 Crores, to provide transmission service for 35 years from the scheduled date of commercial operation (SCOD) which is 24 months from the date of SPV acquisition.
About the Company
Tata Power Company which is a part of the famous Indian conglomerate the Tata Group, is India’s largest vertically integrated power company, primarily involved in the business of generation, transmission, distribution of electricity, manufacturing solar roofs, developing EV charging stations, and many more.
Tata Power Limited offers a comprehensive range of green energy solutions from Rooftop Solar, Home Automation, and Smart Metering to EV Charging, to promote the adoption of sustainable lifestyles. It also provides services such as effluent treatment plants, statutory NOC approvals, and many more to ensure smooth business operations.
It also offers an end-to-end solution for charging infrastructure development, ensuring the best charging experience, emphasizing lean, customized, and cost-effective design solutions, along with timely execution and comprehensive operation and maintenance (O&M) services for its clients.
Financials and Ratios
Its Revenue from operations grew by 27.24 percent from Rs. 12,453 Crores in Q4FY23 to Rs. 15,846 Crores in Q4FY24, accompanied by profits of Rs. 938.81 Crores to Rs. 1,045.58 Crores.
In terms of Return ratios, it has reported a return on equity (ROE) of 11.3 percent, and a Return on capital employed (ROCE) of 11.1 percent. It has reported a debt-to-equity ratio of 1.66.
Written by: Bharath K.S
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