Tata Power is in advanced talks to acquire the remaining stake in Singapore-based Resurgent Power Ventures Pte Ltd from the other shareholders, marking a major consolidation step by one of India's principal integrated power players.
Tata Power is in talks with major institutional investors holding a majority stake in Resurgent, including ICICI Venture Funds Management Co., the Kuwait Investment Authority, and the Oman Investment Authority. These institutional investors collectively own around 74% of Resurgent, while Tata Power owns the remaining 26%.
The talks for the buyout, which have been ongoing for several months, include Tata Power hiring financial advisors for the acquisition. Although the negotiations are private and an agreement has not yet been reached, the talks indicate Tata Power's interest in acquiring Resurgent's assets in full.
Resurgent Power Ventures is engaged in the ownership of a series of power generation and transmission assets within India. These include a major stake in Prayagraj Power Generation Company, a major thermal power plant in Uttar Pradesh, as well as other infrastructure assets in India.
Industry analysts have indicated that this decision by Tata Power is aimed at ensuring a simpler ownership structure and making it easier for the company to strategically deploy capital and management attention to its expanding power operations.
Full ownership of Resurgent Power would provide better control of key thermal and transmission assets in a sector that is undergoing a major shift in the energy sector.
The discussion on transactions is in the context of Tata Power’s larger strategy and focus on developing renewable and hybrid energy capacity. The group recently stated ambitious annual capital expenditures through FY2030 on the back of increasing its lean energy capacity.
Investors have shown enthusiasm regarding the growth story of Tata Power, particularly in the renewable energy division. Another development that also came to the notice of the public is the acquisition of the minority stake of Resurgent by Tata Power. The completion of this deal would be an important step in the development of Tata Power as an integrated energy major.