CESE Determines to Merge the Power Distribution Business

RP-Sanjiv Goenka Group's Power utility CESC, has decided to consolidate its power distribution business, other than in its operations in Kolkata and adjoining areas, under a wholly-owned subsidiary of the company.

Thus, CESC had called off its proposal on the demerger of its power production and distribution business two years ago. However, the demerger proposal has been reserved in November 2019 and the total income of the company had elevated by 3.2 percent at Rs.11,217 crore last fiscal, while net profit grew by nine percent at Rs.1,306 crore.

Eminent Electricity Distribution, the wholly-owned subsidiary of CESC, become a subsidiary of the company with effect from July 1, 2019. In a stock exchange filing on Wednesday, the power utility said its board has decided to “reorient and reorganize” the power distribution business of the company under Eminent Electricity Distribution, as its distribution arm and, over some time and subject to applicable laws, consolidate in Eminent all investments of the company in distribution business (other than in its operations in Kolkata and adjoining areas).

It is been noted that, CESC had called off its proposal on the demerger of its power generation and distribution business two years ago. However, the demerger proposal was withdrawn in November 2019. Total income of the company had increased by 3.2 percent at Rs.11,217 crore last fiscal, while net profit grew 9 percent at Rs.1,306 crore.

It is also a consolidated total income that has been posted a growth of 8.6 percent year-on-year at Rs.2581 crore for the third quarter this fiscal as against Rs 2,377 crore for the same period last fiscal. During the third quarter, net profit grew 24.7 percent y-o-y at Rs 328 crore compared to Rs 263 crore for the same period of FY20. Alongside, the company has also declared an interim dividend of Rs.45 per equity share for the financial year 2020-21.