NTPC to shell out ₹15,000 crore to buy out NEEPCO, THDCIL from Centre

Twesh Mishra New Delhi | Updated on December 30, 2019 Published on December 30, 2019

Transaction set to be completed by end of FY20

NTPC will be forking out close to ₹15,000 crore this fiscal to buy out the Centre’s stake in North Eastern Electric Power Corporation Ltd (NEEPCO) and THDC India Ltd (THDCIL).

According to company officials in the know, NTPC is planning to complete the buyout by the end of FY20 in a bid to aid the Centre that is struggling to meet its disinvestment targets. So far this fiscal, the Centre has mobilised ₹17,364.26 crore through disinvestments. It has a target to garner ₹1,05,000 crore through disinvestment proceeds before the end of the current fiscal.

According to the annual report of these companies for FY19, the net worth of NEEPCO was ₹6,301.29 crore and that of THDCIL was ₹9,280.78 crore as on March 31, 2019.

Last month, the Cabinet Committee on Economic Affairs approved the strategic disinvestment of five Central Public Sector Enterprises including THDCIL (formerly Tehri Hydro Development Corporation India Ltd) and NEEPCO. The Centre has 100 per cent shareholding in NEEPCO. In THDC, it has 74.23 per cent shareholding, with the rest held by the Uttar Pradesh government.

Likely proceeds

Going by the net worth valuation of these companies at the end of FY19, the Centre will be getting at least ₹13,190.41 crore (₹6,889.12 crore for THDCIL and ₹6,301.29 crore for NEEPCO) by shedding its stake in them.

NTPC will also have to pay a premium for the transfer of management control from the Centre. According to sector watchers, this could push the total outgo from the company’s coffers to the exchequer to nearly ₹15,000 crore.

THDCIL presently has 1,513 MW of installed power generation capacity. It has two hydro generating stations — Tehri HPP (4X250 MW) and Koteshwar HEP (4X100 MW) — and two operational wind power plants in Gujarat, one at Patan (25X2 MW) and another at Devbhumi Dwarka (30X2.1 MW). NEEPCO currently operates seven hydropower, three thermal and one solar power project with a combined installed capacity of 1,457 MW.

Published on December 30, 2019
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