Genus Power hits 52-week high on $2-bn GIC deal with smart metering venture

Shares of Genus Power Infrastructures Ltd surged 20 percent to a 52-week high of Rs 169 on July 5, a day after GIC said it would acquire a 74 percent stake in the Indian company’s smart metering solutions arm for $2 billion (over Rs 16,000 crore).

After the deal with Singapore’s sovereign wealth fund, Gem View Investment, an affiliate of GIC, will hold 74 percent and the rest 26 percent shall remain with Genus.

The Genus stock has delivered a massive 70 percent return in the last one month.

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Under the agreement, Chiswick Investment, another affiliate of GIC, plans to invest up to Rs 519 crore in Genus Power through a preferential allotment of warrants. This investment will represent 15 percent of the paid-up share capital of Genus Power on a fully diluted/as converted basis. Additionally, Genus Power will serve as the exclusive supplier of smart meters and related services to the platform as part of the deal.

The Jaipur-based company has said that the deal is the largest funding in the smart metering business in the country. As part of the Revamped Distribution Sector Scheme (RDSS), the government aims to implement the national smart metering project, which involves the installation of 250 million smart meters by 2025. The estimated investment for this ambitious initiative is around $30 billion.

One of the primary objectives of the smart metering projects under RDSS is to address the issue of technical and commercial losses, which currently exceed 15 percent for major Indian utilities. These losses have a significant financial impact on the utilities. Smart metering technology is likely to reduce such losses, enhance operational efficiency of distribution companies, and improve their financial sustainability.

Earlier this year, the company announced that it bagged an order worth Rs 2,855 crore for the appointment of an Advanced Metering Infrastructure Service Provider (AMISP), including designing the AMI system, supplying, installing and commissioning 29.49 lakh smart prepaid meters.

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