THDCIL, NEEPCO acquisitions are pricey, but NTPC can make them work
Acquisitions are seldom fair, especially if it involves government companies. NTPC Ltd will pay ₹11,500 crore to acquire the government’s stakes in THDC India Ltd (THDCIL) and North Eastern Electric Power Corp Ltd (NEEPCO).
NTPC will pay ₹7,500 crore for 75% stake in THDCIL and ₹4,000 crore for full ownership (100%) in NEEPCO.
Financials for the year ended March 2019 peg the acquisition at a price to book value (P/B) of 0.9 times, higher than 0.7 times valuation the market is currently ascribing to NTPC.
