H.G. Infra Engineering Ltd has completed the acquisition of 100% equity shares of Ranipur Chunar Power Transmission Limited, a special purpose vehicle (SPV) formed for a power transmission project in Uttar Pradesh. The deal, valued at ₹1.88 crore, aims to strengthen the company's position in the power transmission industry.

The transaction was executed on September 26, 2026, pursuant to the terms of the Request for Proposal (RFP) and Letter of Award issued by REC Power Development and Consultancy Limited (RECPDCL), a wholly owned subsidiary of REC Limited. HG Infra executed the Share Purchase Agreement (SPA) with RECPDCL at approximately 11:30 am IST. The target entity is registered with the Registrar of Companies, NCT of Delhi-I, having been incorporated on December 12, 2025.

Acquisition details

The acquisition involves the purchase of 50,000 equity shares at a face value of ₹10 each. While the nominal paid-up capital is ₹500,000, the total consideration for the transfer is ₹1,88,49,228 (including taxes). This amount is inclusive of professional fees and reimbursement of expenses. The consideration was paid entirely in cash. As per disclosures, the acquisition does not fall within related party transactions, and neither the promoter nor promoter group holds any interest in the entity being acquired.

Project scope and strategic fit

Ranipur Chunar Power Transmission Limited will undertake the construction and operation of an intra-state transmission system in Uttar Pradesh. The scope includes the establishment of 220/132/33 kV AIS substations at Ranipur (Mau) and Chunar (Mirzapur), along with associated lines. The project has a concession period of 35 years.

The business of the target entity is directly aligned with HG Infra’s core infrastructure operations. This move supports the company’s broader strategy to diversify and strengthen its presence in the power transmission segment, leveraging its existing capabilities in construction and maintenance.

What the numbers show

The total consideration of ₹1.88 crore significantly exceeds the SPV's authorized capital of ₹500,000. This disparity highlights that the valuation is driven by the rights to execute the government-awarded project rather than the tangible assets or historical revenue of the SPV itself. The seller disclosed that the unit contributed negligible turnover or net worth during the last financial year, confirming that the premium paid reflects the strategic value of the 35-year concession period and the future cash flows expected from the transmission assets.

H.G. Infra Engineering Ltd received a show cause notice from the Karnataka tax authority demanding ₹94,00,00,328 in GST liabilities on September 16, 2026. The notice stems from audit proceedings for FY23.

The Deputy Commissioner of Commercial Taxes, Bengaluru, issued the notice under Section 73(1) of the Central Goods and Services Tax Act, 2017 and the Karnataka Goods and Services Tax Act, 2017. The allegations concern input tax credit claims and discrepancies between turnover reported in GST returns and financial statements.

Regulatory Disclosure

The company disclosed the receipt of the notice pursuant to Regulations 30 and 51 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The disclosure was signed by Ankita Mehra, Company Secretary and Compliance Officer.

Company Response

H.G. Infra Engineering stated that it believes the observations and proposed amounts are not sustainable on facts or law. The company does not foresee any material financial impact at this stage. It plans to file a response with proper documentation before the Assessing Authority and expects a favorable outcome based on the merits of the matter.

What the Numbers Show

The aggregate liability of ₹94,00,00,328 relates specifically to FY23 audit proceedings. While the amount is significant, the company’s preliminary assessment suggests the legal basis for the demand is weak. The actual financial impact remains contingent on the adjudication outcome rather than being an immediate cash outflow.