Power Grid Corporation stock surges 5% on bagging 3 transmission projects

Further, on Wednesday, Power Grid board approved a proposal to raise up to Rs 12,000 through the issuance of bonds in one or more tranches in FY25.

Shares of Power Grid Corporation of India rallied 5 per cent to Rs 289.10 on the BSE in Thursday’s intra-day trade after the company said it has been declared as the successful bidder under tariff based competitive bidding (TBCB) to establish inter-state transmission system  on build, own operate and transfer (BOOT) basis. Power Grid stock had hit a 52-week high of Rs 298.95 on March 7, 2024.

Meanwhile, Power Grid, the state-owned power transmission company on Wednesday, approved a proposal to raise up to Rs 12,000 through the issuance of bonds in one or more tranches in 2024-25.

At 09:29 am; the stock was trading 4 per cent higher at Rs 284.40, as compared to 0.5 per cent rise in the S&P BSE Sensex.

 

The first project is the transmission system for the evacuation of power from Rajasthan (Jaisalmer/Barmer Complex). The project comprises the establishment of a new 765/400/220 kV pooling substation at Mandsaur, 765kV D/C transmission line and an extension of associated bays at an existing substation in Madhya Pradesh, Power Grid said in an exchange filing.

The second project, transmission system for evacuation of power from potential renewable energy zone at Khavda in Gujarat, comprises augmentation works at an existing substation in the state.

The third project is a transmission system for the evacuation of power from Rajasthan, involving the establishment of a new 765 kV sub-station at Rishabhdeo, 765 kV D/C transmission lines and the extension of associated bays at other substations in Rajasthan and Madhya Pradesh.

Given Power Grid’s buoyant capex pipeline and its execution track record, analysts believe the company should enjoy valuations closer to private sector peers.

Management has planned capex of Rs 15,000 crore, vs. Rs 12,500 crore guided earlier, and capitalisation of Rs 17,000 crore for FY25. Works in hand total Rs 77,700 crore, of which TBCB projects stand at Rs 41,400 crore and the remainder are under RTM (regulated tariff mechanism).

For FY26, Power Grid has guided for an even stronger capex of Rs 20,000 crore. Further, management indicated scope for further upward revision as further clarity on projects emerges over the next six months. Longer term, the company has a Rs 2.1 trillion capex pipeline for the next decade, analysts at BOB Capital Markets said.