Tata Power, one of India's leading integrated power companies, is in advanced discussions to acquire the majority stake held by three key investors in Resurgent Power. This move is aimed at gaining full ownership of the power platform, which holds significant generation and transmission assets in North India.
Deal to Consolidate Ownership
The company's Managing Director, Praveer Sinha, confirmed to the Times of India that Tata Power is in talks to purchase the combined 74% stake in Resurgent Power. This stake is currently held by the sovereign wealth funds of Oman and Kuwait, along with ICICI Ventures. Sinha cited the conclusion of the funds' nine-year investment cycle as the reason for the potential exit.
Tata Power already holds a 26% stake in the Singapore-registered entity. If the negotiations are successful, the acquisition will grant Tata Power complete control over Resurgent Power, significantly strengthening its footprint in the Indian power sector. The asking valuation for the company, inclusive of its debt, is understood to be approximately $2 billion, though Sinha refrained from commenting on the specific valuation.
Resurgent Power's Asset Portfolio and History
Resurgent Power was established in 2016 with the specific mandate of acquiring distressed power assets in India. Its founding consortium included the State General Reserve Fund of Oman, the Kuwait Investment Authority, Canada's CDP Groupe, and ICICI Ventures. Tata Power entered the picture later, buying its initial 26% stake.
In 2019, the Omani and Kuwaiti funds purchased CDP Groupe's shares, leading to the Canadian pension fund's exit. Currently, the two Middle Eastern sovereign funds collectively own 64% of Resurgent Power, while ICICI Ventures holds the remaining 10% of the stake up for sale.
The company's valuable portfolio comprises:
- A 75% stake in Prayagraj Power Generation Company, which operates a substantial 1,980 MW coal-fired thermal power plant located in Uttar Pradesh.
- Full ownership of two major power transmission companies: South East UP Power Transmission Company (operating within Uttar Pradesh) and NRSS XXXVI Transmission (operating across Uttarakhand, Rajasthan, and Haryana).
Financially, Resurgent Power has shown robust performance, posting a profit of Rs 613 crore on revenue of Rs 6,004 crore in the financial year 2024-25 (FY25).
Strategic Implications for Tata Power's Future
This proposed consolidation is a strategic masterstroke for Tata Power. Full ownership of Resurgent Power's assets will provide a stronger platform to bid for electricity distribution companies (discoms) in Uttar Pradesh once the state government formally invites bids.
Praveer Sinha highlighted the growing opportunity, stating, "Several states are experiencing financial stress in their distribution businesses, necessitating reforms and private sector participation." He added that Tata Power is poised to participate in the bidding process when such opportunities arise.
This ambition aligns with Tata Power's existing expansion plans in distribution. The company has already applied for electricity distribution licenses in Goa and certain areas of Maharashtra. Transmission and distribution are already the largest contributors to Tata Power's revenue and profit, and this acquisition would further cement its dominance in these high-growth segments.
The successful conclusion of this deal will not only mark a major consolidation in India's power sector but also position Tata Power as an even more formidable player in the country's energy landscape.
