NTPC Renewable Energy Ltd IPO to hit markets in 2022-23

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State-run NTPC has plans to list its arm NTPC Renewable Energy Ltd in 2022-23, to raise funds for achieving its ambitious target of 60 GW installed renewable energy capacity by 2032, which entails a total investment of Rs 2.5 lakh crore, a source said.

The source, however, did not disclose the quantum of money to be raised through the initial public offering (IPO) of the NTPC Renewable Energy but said that the equity component of the firm would be around Rs 50,000 crore and the rest of the requirement would be met through long-term loans, debentures, bonds, and other such modes.

Last year in October, state-owned NTPC incorporated a wholly-owned subsidiary for its renewable energy business in the name of NTPC Renewable Energy Ltd.

Earlier this week, NTPC had indicated its intention to list NTPC Renewable Energy Ltd.

Participating in the virtual BloombergNEF (BNEF) Summit, NTPC Chairman and Managing Director Gurdeep Singh had said, “We should not focus on one way of raising funds. We want to soon go to the public for raising funds.” Singh was talking about raising funds for NTPC’s ambitious renewable energy (RE) target and stressed that the company would add 7-8 GW RE every year, which would not be an uphill task for it.

The source said that initially, NTPC Renewable Energy Ltd would begin by adding around 4,000 MW of clean energy capacity in a year, which would be scaled up to 7,000 MW to 8,000 MW eventually in 10 years’ period till 2032.

Singh had exuded confidence that NTPC would exceed its target of 60 GW of RE by 2032.

The source further said that since NTPC is not going for any greenfield power generation capacity addition based on fossil fuels in the future, the funding of Rs 2.5 lakh crore spread over the next 10 years for a clean energy capacity of 60 GW can be achieved easily.

According to the Union Budget 2021, the annual capital expenditure of NTPC has budgeted at Rs 23,736 crore for 2021-22, which is higher than the revised estimates of its Capex of Rs 21,000 crore in 2020-21. Its actual Capex in 2019-20 was Rs 36,618.4 crore.

At present, the NTPC Group has a renewable energy capacity of around 1,365 MW. It plans to have 132 GW of total power generation capacity by 2032, including 60 GW of clean energy.

NTPC has become India’s first energy company to declare its energy compact goals as part of the UN High-level Dialogue on Energy (HLDE). NTPC looks to install 60 GW of renewable energy capacity by 2032.

The country’s largest power producer is also aiming for a 10% reduction in net energy intensity by 2032.