The board of directors of Power Grid Corporation of India Ltd (PGCIL), in a meeting held on August 10, 2021, approved the infusion of fresh equity capital in its joint venture Energy Efficiency Services Ltd (EESL).
In a stock exchange filing, PGCIL said that its board has approved the proposal to infuse fresh equity up to Rs.425 crore in EESL – a joint venture between PGCIL, NPTC, Rural Electrification Corporation (REC) and Power Finance Corporation (PFC).
This fresh equity will result in an increase in PGCIL’s equity stake in EESL.
The PGCIL stock exchange filing, announcing the approval of fresh equity infusion, did not give further details. However, it is learnt through other reliable sources that PGCIL is currently a minority shareholder in EESL.
According to information accessed from EESL’s Annual Report for the year ending March 31, 2020, it is learnt that as of March 31, 2020, EESL equity capital was around Rs.983.328 crore, represented by 98.33 lakh equity shares of Rs.10 each.
As of the given date, NTPC was the single-largest shareholder in EESL with 47.15 per cent equity stake, followed by PFC with 24.97 per cent, REC with 22.18 per cent, and finally by PGCIL with 5.70 per cent.
It may be mentioned that since PGCIL’s equity stake is less than 10 per cent, it does not have the right to nominate a director on the board of EESL. This has been envisioned under the Joint Venture Agreement of EESL.
Also read : EESL’s Smart Meter Order Pipeline Reaches 15 Million
Rights issue
On July 22, 2019, EESL allotted equity shares worth Rs.127.92 crore to its shareholders (joint venture partners) following a rights issue. The rights offer was made on the basis of the existing holding of the shareholders—NTPC, PFC, REC and PGCIL. However, PFC and REC renounced their entitlement in favour of NTPC. Consequently, shares worth Rs.98.12 crore were allotted to NTPC. This included NTPC’s rights portion and the renounced portion of PFC and REC. This is how NTPC has emerged as the single-largest shareholder in EESL. It is further learnt that PGCIL did not exercise its rights entitlement and was not allotted any equity shares.
Featured photograph shows the “UJALA” dashboard, accessed on August 12, 2021. UJALA (Ujjwal Jyoti by Affordable LEDs for All) is a national programme for which EESL is the nodal agency.
