NHPC Subsidiary NHDC Faces ₹231.78 Cr Tax Demand; NHPC Secures 51% Stake in RHPCL

NHDC Limited has received an income tax demand notice for ₹231.78 crore, including ₹45.31 crore in interest, dated March 27, 2026. In a related development, NHPC Limited has increased its shareholding in subsidiary Ratle Hydroelectric Power Corporation Limited (RHPCL) to 51% from 49.72%.

What Happened

NHDC Limited, a subsidiary of NHPC, has been issued a significant income tax demand notice totaling ₹231.78 crore. This figure includes ₹45.31 crore in interest.

The assessment order was dated March 26, 2026, with the demand notice issued on March 27, 2026. NHDC had accounted for ₹184.37 crore as Minimum Alternative Tax (MAT) credit.

Despite the substantial notice, NHDC has stated it anticipates no financial impact and is initiating a rectification process.

In a separate development, NHPC Limited has raised its stake and voting rights in its subsidiary, Ratle Hydroelectric Power Corporation Limited (RHPCL), from 49.72% to 51%.

Why This Matters

A tax demand of this size, even if contested, can raise investor concerns. NHDC's assertion of no expected financial impact and its move towards rectification are key points.

NHPC's increased shareholding in RHPCL to a majority 51% strengthens its control over the joint venture, potentially streamlining decision-making and consolidating financial results.

Background

NHPC Limited, established in 1975, is India's largest hydropower developer, with projects operating and under development across the country.

NHDC Limited (Narmada Hydroelectric Development Corporation) is a subsidiary of NHPC, with NHPC holding a 51% stake. NHDC is primarily involved in electricity generation.

Ratle Hydroelectric Power Corporation Limited (RHPCL) was established as a joint venture between NHPC and Jammu & Kashmir State Power Development Corporation (JKSPDC) to develop the 850 MW Ratle Hydroelectric Project.

Earlier, in December 2025, NHPC's shareholding in RHPCL had temporarily decreased to 49.72% from 59.51% due to an equity infusion by JKSPDC. NHPC had stated at the time that it was contributing matching equity to restore its stake. The current filing shows NHPC's stake is now back to a majority 51%.

What Changes Now

• NHPC solidifies majority control of the Ratle Hydroelectric Project via RHPCL.
• NHDC faces a tax dispute process, with management confident of a favourable outcome.
• Shareholder confidence might be tested by the tax notice, balanced by NHPC's majority stake acquisition.

Risks to Watch

The main risk is the income tax demand against NHDC. If rectification fails, it could lead to financial strain for the subsidiary, though NHPC anticipates no impact.

Peer Comparison

NHPC operates in a competitive hydropower market. Its peers include SJVN Ltd, NTPC Ltd, and Tata Power Co. Ltd. NHPC leads hydropower production with 7,071 MW capacity, followed by SJVN (2,074 MW) and Tata Power (1,389 MW).

Key Figures

• NHDC Limited received an income tax demand notice of ₹231.78 crore, including ₹45.31 crore interest, issued March 27, 2026.
• NHPC Limited increased its shareholding in RHPCL to 51% from 49.72%.

What to Track Next

• Monitor NHDC's progress and outcome on its income tax rectification application.
• Watch for NHPC announcements on its strategic involvement and consolidation of its majority stake in RHPCL.
• Track the financial health and operations of NHPC and its subsidiaries following these developments.