Is Power Grid acquiring Jaypee Power company and what would be the implications?

Power Grid Corporation of India has signed a definitive agreement with Jaiprakash Power Ventures to buy 74% stake in Jaypee Power Grid for a consideration of Rs.352 crore. Post this deal, Jaypee Power Grid will shift from being a JV to being a subsidiary of Power Grid. It may be recollected that Jaiprakash Power Ventures had reported net loss of Rs.8.61 crore in the Dec-20 quarter.

The erstwhile JV and now a subsidiary of Power Grid has developed a 214 km long EHV power transmission project which will supply electricity from the Karcham-Wangtoo project in the state of Himachal Pradesh. The power transmitted will be distributed the states of Himachal Pradesh, Haryana, Punjab, UP and Rajasthan. Power Grid is in the business of transmission lines and the stock has been an outperformer in recent days.