GMR Power to sell stake in non-operating, stressed assets; stock zooms 15%

The transaction will enable GPUIL to meet the proposed One-Time Settlement (OTS) with the lenders of GREL

Shares of GMR Power and Urban Infra (GPUIL) soared 15 per cent to ₹133.90 on the BSE in Tuesday's intraday trade, amid heavy volumes, after the company announced that it will be spinning off gas plants and stressed assets, a move that will improve the bottomline of the company.

 

GPUIL, GMR Energy (GEL), a wholly-owned subsidiary of the company, and GMR Generation Assets Limited (GGAL), a subsidiary of the company, have signed a framework agreement with Synergy Investments Holding Limited (Synergy) for the divestment of their respective stakes in GMR Bajoli Holi Hydropower Private Limited (Bajoli Holi), GMR Vemagiri Power Generation Limited (Vemagiri), and GMR Rajahmundry Energy Limited (GREL).

 

 

The transaction is expected to be consummated on or before September 30, 2025 or such later date as mutually agreed by the parties to the transaction.

 

Bajoli Holi is undertaking a 180-mega watt (Mw) hydro-electric power project, while Vemagiri owns a 388 Mw natural gas-based combined cycle power plant. GREL, meanwhile, owns a 768-Mw natural gas-based combined cycle power plant. The GREL and Vemagiri power plants have been non-operational due to non-availability of affordable natural gas to operate the plants.

 

Synergy is neither part of the promoter group nor is it a related party to the GMR Group. Synergy is owned by a private equity fund managed by Synergy Capital, a strategic investment manager and advisor with offices in the UAE, Singapore and India. Synergy Capital focuses on the industrial and infrastructure sectors globally. Synergy Capital provides structured and innovative solutions across the capital spectrum, coupled with operational value creation, to help companies transform their businesses and optimise their balance sheets.  Follow Stock Market Live Updates Here

 

This transaction will enable GPUIL to meet the proposed One-Time Settlement (OTS) with the lenders of GREL, delever the balance sheet by ~₹4,400 crore and spin off the non-operational gas plants and stressed assets of the GMR Group. This will further improve the bottom line of the company, GPUIL said in an exchange filing.

 

"This transaction gives us the opportunity to spin off the stressed assets from the Group and focus on growing our platform with strong fundamentals. This transaction will help us strengthen the financial position of the company due to reduction of liabilities and is consistent with our 'Asset Light, Asset Right' strategy," Srinivas Bommidala, Managing Director of GPUIL, said.

 

GPUIL has an energy portfolio of over 3,000 Mw installed capacity with a diversified fuel mix spread across India. As part of its growth (Energy 2.0) strategy, aligned to the developing power sector landscape, GPUIL with renewed focus on smart and green energy, has now entered into new age industry opportunities including Smart Meters, Smart Mobility (EV charging infrastructure), and development of Renewable Energy portfolio. It is also developing around 1,000 Mw of clean energy projects in India and Nepal, so as to contribute to a sustainable future.

 

In Transportation and Urban Infrastructure, GPUIL focuses on surface transport projects, primarily roads and railways in India under various models like DBFOT (Design, Build, Finance, Operate, and Transfer) and EPC (Engineering, Procurement, and Construction).

 

At 01:22 PM, GPUIL was trading 14 per cent higher at ₹133.80, as compared to 2.2 per cent rise in the BSE Sensex. The stock had hit a 52-week high of ₹169.20 on September 26, 2024. The average trading volume on the counter jumped over three-fold today with 6.11 million equity shares, cumulatively, changing hands on the NSE and BSE.