NHPC shelves plan for co-promoter stake buy in PTC India-OxBig News Network

Earlier this year, NHPC had informed the power ministry that it would not sell its PTC stake, but would rather consider taking over the shares of other promoters NTPC Ltd, Power Grid Corp. of India and Power Finance Corp in PTC India. However, the company has now decided not to pursue the plan and informed its decision to the Centre, the people cited above said on the condition of anonymity.

NHPC, NTPC, Power Grid and PFC hold about 4.05% each in PTC India, totalling 16.2%. The Life Insurance Corp. of India (LIC) holds 4.13%.

“NHPC will not take over stakes of the other promoters. Given that it is an infrastructure company dedicated to hydro projects, and power trading is not it’s core business, it has decided not invest further in PTC,” said one of the two people above, adding that the company has, however, informed the government that it does not intend to sell its current stake in PTC India.

The power ministry was informed of the decision last month, a second person said.

Queries sent to NHPC, the power ministry, PTC India, NTPC, Power Grid and PFC remained unanswered till press time.

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In January, Mint reported that India’s largest hydropower generator NHPC Ltd is keen on buying out its public sector co-promoters’ stakes PTC India Ltd. In an interview to Mint in February, the chairman and managing director of NHPC had also said that public sector major would shortly decide upon acquiring shares of other PSUs in the entity and the state-run firm will inform the power ministry about its decision.

“We currently have about 4% equity share, and the other companies also have about 4% each. A few of the companies want to exit. NHPC was asked whether it is also interested in exiting. So, we have said that we are not interested in exiting the PTC shareholding…We will continue our investment in PTC. But the question remains whether we are going to increase our holding in the company,” the CMD had told in the interview in February.

Considerations of a stake sale by the PSUs have been underway for the past few years, especially after its finance arm PTC India Financial Services got involved in controversies starting 2022 due to allegations of loan evergreening and corporate misgovernance.

Both PFS and PTC have been under regulatory scrutiny since then. In June last year, the Securities and Exchange Board of India (Sebi) barred PTC India’s erstwhile chairman Rajib Kumar Mishra, and PFS’ former managing director Pawan Singh, from holding any position on the board or management of listed companies for six months and two years, respectively, over suspected corporate misgovernance in PFS. The market regulator also imposed penalties of ₹10 lakh and ₹25 lakh, respectively, on Mishra and Singh.

Read this | RoC imposes penalty on PTC India Financial Services, MD Pawan Singh

However, in December 2024, the Securities Appellate Tribunal (SAT) quashed the Sebi order barring Mishra as a director in listed firms. Mishra approached SAT on the grounds that he was not in charge of PFS. Following this, the PTC India board met and decided that Mishra could not be inducted as a director or CMD of the company.

NHPC’s initial plan, however, did not include the acquisition of PFS, the controversy-hit financing arm of PTC India.

The four PSUs had also appointed ICICI Securities as merchant banker in 2022 for the transaction, after the power ministry approved their exit plan.

In the fourth quarter of FY25, the company reported an over threefold increase in net profit to ₹343 crore from ₹91.3 crore in the year-ago period. However, revenue declined 14.3% to ₹3,006.3 crore from ₹3,507.4 crore in the same period last year.

PTC’s market capitalization stands at ₹5,277.83 crore.

And read | Govt rethinks plan to sell stake in PTC India