Image Source: www.techno.co.in
Techno Electric & Engineering Company Ltd. (TEECL) has taken a decisive step in its capital rotation strategy by executing a definitive agreement for the divestment of its wholly owned subsidiary, NERES XVI Power Transmission Ltd. The enterprise value for the transaction is capped at ₹4.6 billion, signaling a significant monetization of its transmission asset portfolio. This move aligns with Techno’s long-standing approach of developing high-value infrastructure under the Tariff-Based Competitive Bidding (TBCB) model and exiting post commissioning to unlock capital for future growth.
The divestment comes as NERES XVI nears operational readiness, with construction progressing on schedule and regulatory milestones largely achieved.
Key Highlights of the Transaction
Techno Electric has signed an agreement to divest 100 percent equity in NERES XVI Power Transmission Ltd., which houses the North Eastern Region Expansion Scheme-XVI
The enterprise value for the divestment is not to exceed ₹4.6 billion, subject to final adjustments and regulatory approvals
The buyer is expected to be a strategic investor or infrastructure trust focused on long-term annuity-based transmission assets
The transaction includes the transfer of all operational and under-construction assets, liabilities, and concession rights associated with NERES XVI
Project Scope and Operational Status
NERES XVI was awarded under the TBCB framework by REC Power Development & Consultancy Ltd. and transferred to Techno Electric in 2024
The project involves:
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A 400/220/132kV GIS substation at Gogamukh, Assam
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Four 400kV line bays, two 220kV bays, and four 132kV bays
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Associated transmission lines and control systems
The project is expected to be commissioned by November 2026, with construction and land acquisition already completed
Strategic Rationale and Business Impact
The divestment allows Techno Electric to monetize regulated transmission assets and redeploy capital into high-margin EPC and smart grid segments
NERES XVI is projected to generate ₹1,750 crore in revenue over the concession period, but upfront monetization improves return on equity and reduces debt exposure
The move supports Techno’s capital-light model, enabling faster growth in areas like 765kV substations, battery energy storage systems (BESS), and advanced metering infrastructure (AMI)
The company maintains a strong balance sheet and operational efficiency, with minimal working capital stretch despite rising revenues
Financial Performance and Market Position
Techno Electric reported Q1 FY26 EBITDA of ₹80 crore, up 42 percent year-on-year, and profit before tax of ₹124 crore, up 64 percent
The company’s outstanding order book stood at ₹10,408 crore as of June 30, 2025, with ₹7,120 crore attributed to power transmission EPC contracts
Analysts expect the divestment to boost cash reserves and improve asset turnover ratios, enhancing shareholder value
The transaction is likely to be earnings-accretive in FY26, with potential for special dividends or reinvestment into growth verticals
Future Outlook and Expansion Strategy
Techno Electric is targeting ₹2,500 crore in annual order inflows from the transmission EPC space over the next four years
The company is actively bidding for projects involving HVDC systems, STATCOM installations, and high-altitude substations in J&K and Ladakh
It is also ramping up its smart metering business, with 2.25 million meters to be deployed across Jharkhand, Tripura, Kashmir, and Madhya Pradesh by September 2026
Additional divestments of transmission SPVs, including NERGS-I, are under evaluation as part of the capital recycling strategy
Conclusion
Techno Electric’s divestment of NERES XVI Power Transmission Ltd. at an enterprise value not exceeding ₹4.6 billion marks a strategic milestone in its infrastructure monetization journey. By unlocking capital from regulated assets and reinvesting in scalable, high-margin businesses, the company is positioning itself for agile growth and long-term value creation. As India’s power sector evolves, Techno’s disciplined execution and forward-looking strategy continue to set benchmarks in the transmission and EPC space.
Sources: T&D India, Techno Electric Investor Presentation, Moneycontrol, Business Standard, The Economic Times.
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