Tata Power share price jumped nearly 7 per cent to Rs 42.25 per equity on BSE in Tuesday’s trade after the company informed that it has completed the acquisition of 51 per cent stake in TP Central Odisha Distribution Ltd (TPCODL) for Rs 178.5 crore. TPCODL was incorporated in April this year as a wholly-owned subsidiary of Grid Corporation of Odisha (GRIDCO) to carry out the business of Central Electricity Supply Utility of Odisha (CESU). GRIDCO will hold a balance 49 per cent equity stake in TPCODL. Last month, Tata Power share price hit a 52-week low of Rs 27 per equity. As of Monday’s close, Tata Power shares have bounced over 56 per cent from its May low, while still sitting about 87 per cent below from its 52-week high of Rs 74.05 touched in July last year.
Tata Power stock opened at Rs 41.05 and hit an intraday low of Rs 40.55 per equity. Tata Power said that it has taken over the management of CESU, after receiving the Letter of Intent (LOI) from the Odisha Electricity Regulatory Commission (OERC) for the distribution and retail supply of electricity in Odisha’s five circles consisting of Bhubaneshwar, Cuttack, Puri, Paradeep and Dhenekal.
As per the order issued by OERC on May 28, 2020, Tata Power will hold 51 per cent equity with management control and state-owned GRIDCO will have the remaining 49 per cent equity stake in the company. “As per the agreement, the company will retain all the existing employees of CESU and will govern them by their existing policy structure,” the company said in its press release. It also said that the company will provide better facilities to employees to update their skills and knowledge as a part of change management in CESU.
Around 10.40 AM, Tata Power stock was trading 3.67 per cent higher at Rs 41 apiece on the BSE as compared to a 0.48 per cent rise in S&P BSE Sensex. “Our tie-up with CESU is a huge development for Tata Power. We are committed to provide reliable, affordable and quality power supply along with superior customer service, backed by innovative technology,” said Praveer Sinha, CEO & MD, Tata Power.