Adani Transmission jumped 3.9 per cent in early trade on Monday after the company said it has signed a share purchase agreement with Essar Power to acquire 100 per cent stake in Essar Power Transmission Company (EPTCL). This acquisition is in line with the company’s value-added growth strategy through organic and inorganic growth opportunities. The cost of acquisition is Rs 1,913 crore.
Share of Adani Transmission quoted 52-week high and 52-week low of Rs 3000.0 and Rs 860.5 respectively. Data from the exchange shows that at the current price, the stock trades at 181.24 times its 12-month earnings of Rs 10.95 per share and 26.32 times its price-to-book value.
“The acquisition of Essar’s transmission assets will strengthen ATL’s presence in central India. With this acquisition, ATL is on course to achieve its 20,000 ckt km target ahead of time. We remain at the forefront of grid sustainability and provide sustainable, reliable and affordable energy solutions while creating long-term sustainable value for our stakeholders,” Anil Sardana, MD and CEO, ATL was quoted as saying in a PTI report.
The sale is a part of the deleveraging strategy, following which Essar has paid over Rs 1.8 lakh crore to banks and financial institutions in the last three years – the biggest loan repayments in its history, PTI reported.
Essar Power Transmission Company Limited (EPTCL), a unit of Essar Power, has 465 km of transmission lines in three Indian states. The assets dealt with is the 400 kV inter-state transmission line connecting Mahan with Sipat Pooling Substation.
The project operates under the CERC regulated returns framework and was commissioned on 22 September 2018. The proposed transaction will be executed through transaction phases subject to necessary regulatory approvals and other consents.
Adani Transmission Ltd said, “The acquisition is in line with ATL’s value-added growth strategy through organic and inorganic growth opportunities. With this acquisition, ATL’s cumulative network will reach 19,468 ckt kms, of which 14,952 ckt kms are in operation. and 4,516 ckt km is under various stages of execution.Also, with this scale of operation, ATL will achieve synergy in terms of O&M cost optimization and shared resources.
“It will also strengthen its position of being the largest private sector transmission and distribution company in the country. The asset will be operated in line with ATL’s operational excellence framework committed to the highest standard of environmental, social and governance (ESG) aspects,” the company said.
Commenting on the stock, Manoj Dalmiya, Proficient Equities Ltd. said: “Adani Transmission has recently witnessed a sell-off since last 1 month. Key reasons include selling of FIIs due to profit-booking, higher valuations and rising interest rates. Its current PE ratio is around 180 while the sector PE is around 10. Also, there are such negative sentiments as Adani shares have come under SEBI scrutiny recently for being FII favourites. The recent acquisition of Essar Power Transmission is in line with its value-added growth strategy, making it suitable for long-term accumulation. The stock is currently not showing any significant trend and may enter into a consolidation position, any close below Rs 1,831 can take it to Rs 1,665 levels.
The views and investment suggestions of experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decision.
read all breaking news , today’s fresh news And IPL 2022 Live Updates Here.