PTC stake sale saga: NTPC’s buyout plan hits an NHPC wall
- PTC India’s long-running stake sale saga took a twist as NTPC made a bid to buy out the company’s co-promoters but hit a wall.
- NHPC, which had earlier attempted a similar buyout but dropped the plan, is unwilling to sell its stake.
New Delhi: After NHPC Ltd dropped plans to buy out its co-promoters’ stake in controversy-hit PTC India Ltd, thermal power giant NTPC Ltd pitched a similar proposal but has run into an obstacle.
NHPC, India’s largest hydropower generator, is unwilling to sell its stake in the power trading joint venture although it had, while shelving its buyout plan, said power trading was not its core business.
Apart from NTPC and NHPC, PTC’s other promoters are Power Grid Corp. of India Ltd and Power Finance Corp. Ltd. The four state-owned companies hold 4.05% each in PTC.
“In the past two months NTPC has offered to buyout the shares of the other promoter PSUs," said an executive familiar with the developments.
Another executive said there had been no further movement on NTPC’s proposal. “NHPC plans to hold on to the shares in PTC India given that it has been giving good dividends," this person said.
For 2024-25, PTC announced a cumulative dividend of ₹11.7 per share. A back-of-the-envelope calculation based on the 12 million PTC shares owned by each co-promoter amounts to a payout of ₹14 crore for each of them.
PTC India’s consolidated net profit in the April-June first quarter surged 61% from ₹150.76 crore a year earlier to ₹242.88 crore.
So far this year, the stock has gained more than 10%, outpacing the benchmark Nifty 50’s 3.8% rise. On Friday, though, PTC India fell 1.39% to ₹167.17 per share on NSE, while the Nifty 50 lost 0.95%.
NTPC, NHPC, Power Finance, Power Grid and the Union ministry of power did not reply to Mint’s queries emailed on Thursday.
- NTPC’s attempt to consolidate ownership in PTC India by buying out its co-promoters has hit resistance, with NHPC backtracking on divestment despite earlier signalling an exit. The impasse underscores the uncertainty surrounding PTC’s much-discussed promoter stake sale.
- NHPC and other promoter PSUs see little incentive to sell as PTC continues to deliver attractive payouts— ₹11.7 per share in FY25, translating into nearly ₹14 crore annually for each. The steady income stream has made retaining stakes more rewarding than selling them.
- Even as PTC grapples with a legacy of governance controversies tied to its finance arm, the company has shown strong fundamentals—posting a 61% jump in Q1 net profit and a 10% stock rise this year—helping it retain investor interest.
PTC India’s checkered past
All four PTC co-promoters had considered selling their stake after the company’s finance arm, PTC India Financial Services (PFS), got embroiled in controversies in 2022 over allegations of loan evergreening and corporate misgovernance. Both PFS and PTC have been under regulatory scrutiny since then.
That year, PTC’s co-promoters appointed ICICI Securities as a merchant banker for selling their stake in the company after the power ministry approved their exit plan.
In January this year, Mint reported that NHPC, India’s largest hydropower generator, was keen on buying out the stakes of PTC’s co-promoters.
In an interview to Mint in February, NHPC’s then chairman and managing director, Raj Kumar Chaudhary, said the company would shortly decide on acquiring the shares of PTC’s other promoters and inform the power ministry. However, NHPC dropped the plan later.
In its annual report for 2024-25, NHPC said it was “exploring options regarding sale of stake/acquiring additional shares of other Promoters/ continuing with existing stake. Pending final decision in the matter, the investment in PTC India Ltd has been continued to be classified as a non-current financial asset."
In June last year, the Securities and Exchange Board of India barred PTC’s erstwhile chairman, Rajib Kumar Mishra, and PFS’s former managing director, Pawan Singh, from holding any position on the board or management of listed companies for six months and two years, respectively, over suspected corporate misgovernance in PFS.
The market regulator also imposed penalties of ₹10 lakh and ₹25 lakh, respectively, on Mishra and Singh.
However, in December 2024, the Securities Appellate Tribunal (SAT) quashed the Sebi order barring Mishra as a director in listed firms.
Mishra had approached SAT on the grounds that he was not in charge of PFS. Following this, the PTC India board met and decided that Mishra could not be inducted as a director or as the company’s chairman and managing director.
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