Power Grid Corporation Rescues NHPTL with 50% Stake Acquisition

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On Tuesday, the state-owned Power Grid Corporation announced a significant agreement, committing to inject funds and acquire a 50% stake in the struggling National High Power Test Laboratory Pvt Ltd (NHPTL). This move was formalized through a supplementary joint venture agreement signed on April 23, 2024, as disclosed in a regulatory filing.

NHPTL, originally a collaboration among NTPC, NHPC, POWERGRID, DVC, and CPRI, will see a substantial financial boost pending approval from the management of its joint venture parties, namely NTPC, NHPC, DVC (Damodar Valley Corporation), and CPRI (Central Power Research Institute).

Following a meeting held on September 15, 2022, a revival strategy was devised in consultation with the Ministry of Power to address NHPTL's financial challenges and ensure the sustainability of its vital testing services for high-voltage transformers nationwide. This plan entails equity transactions among shareholders, resulting in Power Grid's revised equity stake in NHPTL at 50%, while the remaining 50% will be equally distributed among the other four joint venture partners.

Upon the completion of Power Grid's equity infusion, the board composition of NHPTL will be adjusted to include two directors, with the chairman representing Power Grid and one nominee director appointed by the other promoters on a rotational basis, as outlined in the filing.

The primary objective of this joint venture is to establish a fully independent, professionally managed High Power Short Circuit Test Facility in India. This facility will cater to the electrical equipment manufacturing industry and power supply utilities by offering a comprehensive range of short-circuit testing services compliant with both Indian and international standards.