Shares of Adani Transmission (ATL) hit a new high of Rs 924.40 as they rallied 6 per cent on the BSE in intra-day trade on Tuesday on the acquisition of Warora-Kurnool Transmission Limited (WKTL) from Essel Infraprojects Limited. The company said the acquisition is done at an enterprise valuation of Rs 3,370 crore. The stock of Adani Group electric utilities company surpassed its previous high of Rs 890 touched on March 24, 2021.
As per the agreement, WKTL will develop, operate, and maintain transmission lines aggregating to around 1,750 ckt km. The two significant 765 kV inter-state transmission lines link Warora to Warangal and Chilakaluripeta to Kurnool via Hyderabad, with a new 765/400 kV sub-station at Warangal, which shall be built & operated as a part of the agreement.
The project was awarded through a competitive bidding process on a build, own, operate, maintain basis and has a concession life of 35 years. The agreement has been signed post consent by the Central Electricity Regulatory Commission (CERC) for substitution of the original awardee in the contract by ATL, for 100 per cent of equity holding in WKTL, the company said in a regulatory filing.
The regulatory approval for substitution of the original awardee in the contract by ATL has already been received from CERC. The lender’s consent and other necessary regulatory approvals shall be obtained before the closure of the transaction. The acquisition is expected to be completed in one month subject to all necessary regulatory approvals and other consents, it said.
The acquisition of WKTL will bolster ATL’s pan-India presence, consolidating further its position as the largest private sector transmission company in India. This strategic West to South 765 KV interconnector with Substation in Southern India, completes ATL presence in all regions of the country.
This asset will not only increase ATL’s size and scale but will also take ATL closer to its target of setting up 20,000 ckt km of transmission lines by 2022. The acquisition is a further demonstration of ATL’s drive towards differentiated capability through inorganic growth, successful integration and making such assets value accretive, for long term sustainable value creation for its stakeholders.
In the past three months, the stock of Adani Transmission has zoomed 113 per cent as against a 5 per cent rise in the S&P BSE Sensex. At 09:30 am, it was trading 3.5 per cent higher at Rs 899 as compared to a 1.1 per cent gain in the S&P BSE Sensex.