Welspun Enterprises shares jumped as much as 10.58 per cent in the early trade on Monday after the company on Sunday informed bourses that Welspun Energy, in which Welspun Enterprises holds 15.49 per cent stake, has signed a special purchase agreement (SPA) with Tata Power Renewable Energy for divestment of its subsidiary Welspun Renewable Energy Private Ltd.
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At 9.50 am, shares of Welspun Enterprises were trading 3.83 per cent up at Rs 63.75. The scrip opened at Rs 66 and has touched a high and low of Rs 67.90 and Rs 63, respectively, in trade so far.
Tata Power Renewable Energy is a 100 per cent subsidiary of Tata Power Company. The deal represents the largest transaction in renewable space in India. Tata Power shares which surged over 2.5 per cent in the early trade were trading 0.07 per cent down at 75.95 (at 9.52 am).
Welspun Renewable Energy has one of the largest operating solar portfolios in India spread across ten states. The company has about 1,140 MW of renewable power projects comprising of about 990 MW solar power projects and about 150 MW of wind power projects. The transaction is subject to various conditions precedent which includes statutory and other regulatory approvals.
The enterprise value (100 per cent basis) of the transaction excluding closing adjustments is Rs 9249 crore. The transaction is expection to be completed by end of September 2016.
On a year-to-date basis, the share price of Welspun Enterprises slipped 3.69 per cent to Rs 61.40 till June 10 whereas BSE Sensex gained 1.82 per cent during the same period.
For the quarter ended March 31, 2016, Welspun Enterprises reported a net profit of Rs 2.85 crore, down 80.40 per cent, against Rs 14.54 crore in the corresponding quarter a year ago.