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Capital market watchdog Sebi has approved the proposed merger of Reliance group's two power transmission entities in Gujarat and Maharashtra with Reliance Infrastructure.
The proposal is for amalgamation of Western Region Transmission (Gujarat) Pvt Ltd (WRTGL) and Western Region Transmission (Maharashtra) Pvt Ltd (WRTML) with Anil Ambani group firm RInfra.
The move would help in reducing managerial costs and administrative costs, among others.
Both entities are step-down wholly-owned subsidiaries of RInfra held through Reliance Power Transmission Ltd (RPTL).
The Securities and Exchange Board of India (Sebi), in a letter to the National Stock Exchange (NSE) dated January 30, gave its consent for the amalgamation.
"... We do hereby convey our no-objection with limited reference to those matters having a bearing on listing/ delisting/continuous listing requirements within the provisions of the Listing Agreement," Sebi noted.
NSE conveyed the same to the company in a communication on February 4 and also said the amalgamation scheme should be submitted to the High Court within six months.
Post High Court nod, the company is required to submit copy of the court approved scheme and results of shareholders' voting on the proposal, among others.
The consolidation of the power transmission businesses by amalgamating WRTGL and WRTML into RInfra would lead to synergies of operations and integrate business functions, as per the amalgamation scheme.
According to RInfra, the merger would help to reduce managerial overlaps and administrative cost, and remove "multiple layer inefficiencies".
