Tata Power declines a tad after announcing acquisition of Welspun Renewable Energy

Tata Power Company dropped 0.4% at 75.65 and Welspun Enterprises rose 1.1% at Rs 62.10 at 11:53 IST on BSE after Tata Power Renewable Energy signed a share purchase agreement to acquire Welspun Renewable Energy Private Limited.

Meanwhile, the S&P BSE Sensex was off 347.27 points or 1.3% at 26,288.48

Tata Power Renewable Energy (TPREL) is a wholly owned subsidiary of Tata Power Company. Welspun Enterprises holds 15.49% stake in Welspun Energy Private Limited. Welspun Renewable Energy Private Limited (WREPL) is a subsidiary of Welspun Energy Private Limited. Tata Power said that acquisition of WREPL will enable it to expand its renewable energy portfolio. WREPL is engaged in the business of power generation in renewable sector. It has about 1,140 megawatts (MW) of renewable power projects comprising of about 990 MW solar power projects and about 150 MW of wind power projects. Out of 1,140 MW renewable portfolio, nearly 1,000 MW of capacity is operational and balance capacity is under advanced stages of implementation. After the acquisition of WREPL, TPREL will have renewable assets portfolio of about 2,300 MW, making it the largest renewable power company in India. TPREL is Tata Power's primary investment vehicle for the clean and renewable energy based power generation capacity.

The acquisition is being made at an enterprise value of Rs 9249 crore, subject to closing adjustments. WREPL reported consolidated revenue of Rs 768 crore for the year ended 31 March 2016 (FY 2016). The transaction is expected to be completed by end of September 2016

Tata Power is an integrated power company. The company together with its subsidiaries and jointly controlled entities has an installed gross power generation capacity of 9,184 megawatts (MW) and a presence in all the segments of the power sector viz. fuel security and logistics, generation (thermal, hydro, solar and wind), transmission, distribution and trading.

Based on consolidated financial performance, Tata Power's net profit jumped 126.4% to Rs 360.25 crore on 19.1% growth in net sales to Rs 9333.52 crore in Q4 March 2016 over Q4 March 2015.

Welspun Enterprises, part of the Welspun Group, is an operating company as well as a holding company in the business of infrastructure, oil & gas exploration and renewable energy.

Welspun Enterprises' net profit dropped 80.4% to Rs 2.85 crore on 30.2% fall in total income to Rs 96.37 crore in Q4 March 2016 over Q4 March 2015.

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