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Airtel Acquires 12.07% Stake In Egan Solar Power For Rs 1.33 Crore
Telecommunications service provider, Bharti Airtel, recently announced plans to purchase 283,400 (12.07 percent) equity shares of Egan Solar Power Private Limited. The acquisition, according to the exchange filing, aims to satisfy the legal need for captive power usage. The company spent a total of Rs 1,33,76,480 on 2,83,400 shares at a premium of Rs 37.20.
After the telecom company announced it has signed an agreement for the acquisition of 2,83,400 equity shares (12.07% interest) in Egan Solar Power Private Limited, shares of Bharti Airtel Ltd came under scrutiny today. According to the legal requirement for captive power consumption, the unlisted company is a special purpose vehicle (SPV) established for the purpose of owning and operating the captive power plant.
The price of Bharti Airtel shares increased from its previous close of Rs. 838.70 to an intraday high of Rs. 842.40. The company's market capitalization was Rs. 4.69 lakh crore. On the BSE, the company's 0.12 lakh shares changed hands for a total transaction value of Rs. 1.01 crore.
A special purpose vehicle called Egan Solar Power Private Limited was created with the intention of owning and managing a captive power plant. The business actively participates in setting up, launching, and producing electricity using renewable energy sources. It recently disclosed a fiscal year 2023 revenue of Rs 4.15 crore.
In line with Bharti Airtel's goals of adhering to the rules governing captive power plants as outlined by the Electricity Act of 2003 and the Indian Electricity Rules of 2005, the acquisition, the company claims, is in line with the acquisition. Bharti Airtel can also purchase affordable renewable energy sources thanks to the action.
The deal will only go through if Egan Solar receives the required regulatory authority approvals and consents for open access to captive electricity consumption.
In the fourth quarter of fiscal year 2022–2023 (Q4 FY23), Bharti Airtel announced a profit increase of approximately 50% year over year (YoY). Comparing Q4 FY23 to Q4 FY22, the telecom operator's consolidated net profit was Rs 3,006 crore as opposed to Rs 2,008 crore. From Rs 31,500 crore in the same quarter last year to Rs 36,009 crore in the March 2023 quarter, Airtel's operating revenue increased dramatically. A dividend of Rs 4 per fully paid-up equity share was also issued by the telecom provider.