Tata Power Co. Ltd witnessed a surge of over 2% in its shares today following the receipt of a Letter of Intent (LoI) from REC Power Development and Consultancy Limited, a wholly-owned subsidiary of REC Limited. The LoI signifies the acquisition of Jalpura Khurja Power Transmission Limited, a project special purpose vehicle (SPV), in a transaction valued at Rs 838 crore.
As a result of this positive development, Tata Power shares rose by 2.55% to Rs 385.75, surpassing the previous close of Rs 376.15 on the Bombay Stock Exchange (BSE). The market cap of Tata Power rose to Rs 1.21 lakh crore, reflecting the investors’ confidence in the company’s strategic moves.
Tata Power’s stock trajectory in the past year has been noteworthy, reaching a 52-week low of Rs 182.45 on March 28, 2023, and attaining a 52-week high of Rs 412.75 on February 9, 2024. Over the year, the stock has gained an impressive 86.30%, with a remarkable 65.80% surge in the last six months.
The acquisition involves the development of the Project SPV (Jalpura Khurja Power Transmission Limited) on a build-own-operate-transfer basis. The transmission service will be provided for 35 years from the schedule date of commercial operation (SCOD), which is 18 months from the date of SPV acquisition, as outlined by Tata Power.
The company reported a consolidated net profit of Rs 1,076.12 crore in the third quarter of the fiscal year 2023-24, marking a 2.28% rise from Rs 1,052.14 crore in the corresponding period of the previous fiscal. Revenue from operations also experienced a positive growth of 3.69% in Q3 FY24, reaching Rs 14,651 crore compared to Rs 14,129.12 crore in the same quarter last fiscal. The expenses of the Tata Group firm increased proportionately to Rs 14,254.11 crore in the October-December 2023 quarter from Rs 13,745.89 crore in Q3 FY23.
