Torrent Power Acquires 100% stake in Surya Vidyut

No image 5paisa Research Team

Last Updated: 12th December 2022 - 11:46 am

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Torrent Power, belonging to the Samir Mehta Group of Gujarat, has entered into a stock purchase agreement with CESC Ltd based in Kolkata. The agreement is to acquire 100% of Surya Vidyut Limited for a consideration of Rs.790 crore.

Surya Vidyut is 54% owned by CESC and 46% owned by Haldia Energy Ltd. However, since Haldia Energy is a 100% subsidiary of CESC, Surya Vidyut effectively becomes a 100% subsidiary of CESC.

CESC is part of the RP Goenka group which is headed by Sanjeev Goenka. Surya Vidyut is structured as a special purpose vehicle (SPV) and it owns 156 MW  of Wind Energy generation capacity. 

These wind energy plants are located across the states of Gujarat, Maharashtra and Madhya Pradesh. Since Torrent is based out of Gujarat, these plants also become contiguous to the geographical location of their core business interests.

It is not just the existing 156 MW capacity that is of interest but also the capacity that is currently under development. Additional renewable energy projects to the tune of 815 MW are currently under development for which the LOA has already been executed and the power purchase agreements (PPA) have been signed off for 515 MW of capacity.

For its existing capacity of 156 MW spread across Gujarat, Maharashtra and Madhya Pradesh, Surya Vidyut has existing 25 year PPAs with the state DISCOMS at an average weighted tariff of 4.68 per KWH.
Most of the large power companies ranging from NTPC to Tata Power and the Adani group are heavily investing in renewable energy to improve the green mix in their power portfolio. That is what most of the power companies are currently trying to do.

For Torrent, which is a key player in the power sector in Gujarat, a big renewable shift will help reduce their carbon footprint and help improve their valuations overall. The Torrent group of Gujarat is already a dominant player in pharmaceuticals, power as well as into gas distribution. 

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