On Tuesday, shares of Tata Power rose as much as 6.82 per cent to Rs 42.25 apiece on the BSE after it informed the exchanges on the previous day of the completion of the acquisition of 51 percent stake in TP Central Odisha Distribution Ltd (TPCODL) for Rs 178.5 crore.
TPCODL carries out the business of Central Electricity Supply Utility of Odisha (CESU). The acquisition paves the way for taking over the power supply business of five cities in Odisha by Tata Power.
"Tata Power has today acquired 51 per cent equity stake in TPCODL at a consideration of Rs 178.5 crore," Tata Power said in a statement on Monday.
According to the statement, GRIDCO will hold the rest 49 percent stake in TPCODL.
TPCODL was incorporated on 6 April 2020 as a wholly-owned subsidiary of GRIDCO to carry out the business of CESU.
Tata Power said it has taken over the management of CESU, after receiving the Letter of Intent from the Odisha Electricity Regulatory Commission (OERC) for the distribution and retail supply of electricity in Odisha's five circles consisting of Bhubaneswar, Cuttack, Puri, Paradeep and Dhenkanal.
As per an order issued by OERC on 28 May 2020, Tata Power will hold 51 percent equity with management control and state-owned GRIDCO will have the remaining 49 percent equity stake in the company.
"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. The success of our Delhi, Mumbai and Ajmer distribution businesses are testament to this fact," Tata Power CEO & MD Praveer Sinha said.