Power Giant and India’s largest power generation utility firm, NTPC Limited has expressed their interest to purchase 51% stake in BSES Rajdhani Power Ltd (BRPL) and BSES Yamuna Power Ltd (BYPL), the Delhi Distribution Business of Reliance Infrastructure Ltd. Others Companies who are in the foray to acquire the said businesses are Enel Group of Italy, Torrent Power Ltd, and Greenko Group.
What this means:
This acquisition move holds significance because, with this, NTPC, which is primarily a power generation company is venturing into the distribution business. The deal seems quite juicy for NTPC since these power distribution utilities are some of the most stable and lucrative assets in India, with the national capital reporting the lowest aggregate technical and commercial loss of 9.7% in the country. Adding to that, acquisition of a majority stake in BSES discom business will help NTPC in forwarding integration as it already supplies about 70 percent of discom’s electricity requirement from various sources. Going ahead, NTPC is also likely to compete in the privatization exercise of power distribution utilities in the Union Territories which planned by the Union Government.