The deal, which could rank among the largest in India’s energy services sector, will begin by mandating an investment banker to drive the sale process.

IntelliSmart is replacing 27.6 million of India’s 250 million conventional meters with smart meters, in the world’s largest such program, which aims to reduce power theft and ensure reliable electricity supply. EESLa joint venture of NTPC Ltd, Power Grid Corp. of India Ltd, Power Finance Corp. and REC Ltd, hold 332.2 million shares in IntelliSmart according to its FY24 annual report, with each share having a nominal value of ₹10.

“EESL is looking at exiting the JV and would appoint an investment banker for the process,” said one of the two people cited above.

Queries sent to spokespersons for EESL, NIIF and IntelliSmart remained unanswered till press time.

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The deal comes at a time when there are not many state-owned companies in the energy services space while private companies are growing, with major business groups including Tata Power, Adani Group and GMR Group entering the space.

IntelliSmart was formed in 2019 with the aim of financing and driving the deployment of smart meters by power distribution companies, with NIIF owning 51% of the shares and EESL owning 49%. It has presence in Uttar Pradesh, Assam, Gujarat, Bihar. Gujarat, Rajasthan and Haryana, apart from the national capital. By November 2023, it had secured an order book of 20 million meters, and in May this year, it completed the implementation of 620,000 meters in Assam under the Revamped Distribution Sector Scheme (RDSS).

IntelliSmart, which has also entered gas metering services, has four subsidiaries, which operate as special purpose vehicles (SPVs) in specific states and regions. These are Paschimanchal Infrastructure Pvt Ltd, Assam Smart Metering Pvt. Ltd, Dakshin Gujarat Smart Metering Pvt. Ltd and Madhyanchal One Infrastructure Pvt. Ltd.

In FY24, it posted a net profit of ₹SEK 27.06 million, against a net loss of ₹2.06 million in FY23. Its revenue from operations increased almost three times more ₹SEK 243.52 million, from ₹84.96 crore during the same period a year earlier.

The plan to exit the joint venture also comes at a time when EESL has been facing financial problems and has to recover dues from states under the National Street Lighting Programme. During FY23, the company reported a net loss of ₹277.77 crore, against the loss of ₹153.32 crore in the previous fiscal year.

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Prepaid Smart Metering is a flagship program of the Center to modernize the power distribution space and make it more efficient and ensure prompt payment both from government agencies, commercial properties and households. It would be the key to implementing the time tariff in the country, which means varying tariffs for electricity for different times of the day. Under the changes made to electricity rules last year, power tariffs could be reduced by up to 20% during the day and increased by up to 20% during peak hours. Known as the Time of Day (ToD) Tariff system, consumers will be charged different rates for electricity based on time of day.

According to the Union Power Ministry’s National Smart Grid Mission website, 222.4 million of the targeted 250 million smart meters have been sanctioned and 16.4 million meters have been installed so far.