REC Limited, a Maharatna company under the Government of India, has announced the incorporation of two new wholly-owned subsidiaries, marking a significant expansion in its power transmission operations.

New Subsidiaries

REC Power Development and Consultancy Limited (RECPDCL), a wholly-owned subsidiary of REC Limited, has established two new companies:

1. Kempegowda Power Transmission Limited
2. Barmer HVDC Power Transmission Limited

Both entities were incorporated on September 30, with an authorized and paid-up capital of ₹5,00,000 each.

Project Details

Kempegowda Power Transmission Limited

This subsidiary was formed in response to an order dated May 16 from the Energy Department, Government of Karnataka. The company will focus on:

• Establishing a 400 kV Kempegowda Layout in Bengaluru Urban
• Acting as the Bid Process Coordinator (BPC) for selecting a bidder for the project

Barmer HVDC Power Transmission Limited

Created following a Gazette Notification dated August 29 by the Ministry of Power, Government of India, this subsidiary will:

• Establish a Transmission System for Evacuation of Power from Rajasthan REZ Ph-IV (Part-5:6 GW) [Barmer Complex]
• Focus on Barmer-II: 6 GW (Solar) (LCC Configuration)
• Serve as the BPC for selecting a bidder for the project

Bidding Process and Future Ownership

Both subsidiaries will operate under the Tariff Based Competitive Bidding (TBCB) guidelines. Once a successful bidder is selected, each company will be transferred to the respective bidder along with all assets and liabilities.

Industry Impact

These new subsidiaries underscore REC's commitment to expanding India's power transmission infrastructure. By facilitating the development of key transmission projects in Karnataka and Rajasthan, REC is playing a crucial role in enhancing the country's renewable energy capacity and improving power distribution.

Corporate Structure

As wholly-owned subsidiaries of RECPDCL, both new entities are also considered subsidiaries of REC Limited, as per Section 2(87) of the Companies Act, 2013. This structure allows REC to maintain strategic control while preparing for eventual transfer to successful bidders.

The establishment of these subsidiaries demonstrates REC's proactive approach in supporting India's growing energy needs and its commitment to facilitating efficient power transmission across the country.

REC Limited , a Maharatna company in the power sector, has successfully completed the sale of its subsidiary, Rajgarh Neemuch Power Transmission Limited, to OR Infra Projects Limited for ₹5.00 crore. This strategic move aligns with REC's ongoing efforts to streamline its operations and optimize its portfolio of assets.

Transaction Details

The divestment involves the transfer of REC's entire shareholding in Rajgarh Neemuch Power Transmission Limited, comprising 50,000 equity shares. The transaction was executed through REC Power Development and Consultancy Limited (RECPDCL), a wholly-owned subsidiary of REC Limited.

Regulatory Compliance

In compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, REC has disclosed the following key details of the transaction:

• The Share Purchase Agreement was executed on September 29.
• The successful bidder, OR Infra Projects Limited, was selected through a tariff-based competitive bidding process.
• The consideration for the sale includes a professional fee of ₹15.00 crore and reimbursement of expenses.

Impact on REC

REC has stated that the turnover, revenue, income, and net worth contributed by Rajgarh Neemuch Power Transmission Limited during the last financial year were negligible. This suggests that the divestment is unlikely to have a significant impact on REC's overall financial position.

Regulatory Aspects

It's worth noting that:

• The transaction does not fall within the purview of related party transactions.
• OR Infra Projects Limited, the acquiring company, does not belong to the promoter or promoter group of REC.
• The sale is not in the nature of a slump sale, and the consideration was determined in accordance with the guidelines issued by the Ministry of Power, Government of India.

This divestment marks a strategic move for REC, potentially allowing the company to focus on its core operations and optimize its resource allocation. As the power sector continues to evolve, such strategic decisions may play a crucial role in shaping the future of major players like REC Limited.