NTPC seeks investor for RE arm before IPO next year
Dec. 29: NTPC Ltd, India's largest electricity producer, is seeking a strategic investor in its renewables business prior to taking the unit public next year, said a company official with knowledge of the matter.
NTPC Renewable Energy Ltd, a fully owned subsidiary of the New Delhi-based firm, plans international roadshows in the financial year starting April to find a partner and hopes an investor will boost the value of the subsequent IPO, said the official, who asked not to be identified because the plans are still private.
India is the world's third-biggest emitter and remains deeply reliant on coal, but the government plans to more than quadruple renewable power capacity by the end of the decade to meet climate commitments. NTPC this year nearly doubled its clean power installation target to 60 gigawatts by 2032.
"The company is going to need a significant amount of equity money" to meet the target, said Rupesh Sankhe, vice president at Elara Capital India Pvt Ltd in Mumbai. "Bringing in equity partners is a natural choice."
The plan to have 60 GW RE capacity would entail an investment of Rs 2.5 lakh crore.
An official said the equity component of NREL would be around Rs 50,000 crore and rest of the requirement would be met through long-term loans, debentures, bonds and other such modes.
NREL, a 100 per cent subsidiary of NTPC Ltd, currently has a renewable project portfolio of 3,850 GW. of which 970 MW projects are under construction and 2,880 MW projects have been won and are in different phases of implementation.
NTPC had incorporated NREL in October 2020 to undertake renewable energy business.
The present installed capacity of NTPC Group is 67,907.5 MW—including 13,675 MW through joint ventures/subsidiaries— comprising 48 NTPC stations (23 coal-based stations, seven gas-based stations, one hydro station, one small hydro, 15 solar PV and one wind-based station) and 26 joint venture stations—nine coalbased, four gas-based, eight hydro, one small hydro, two wind and two solar PV.