Value unlocking plan still on for renewable energy arm, says NTPC

NTPC reported a six percent drop in overall net profit at Rs 4,871.55 crore for the March quarter

Power giant NTPC  is still considering a strategy sale initiative for its renewable energy arm NTPC Green Energy Ltd (NGEL) apart from raising funds through an initial public offering (IPO), senior NTPC officials said.

“There was a definite plan for monetisation of our renewable energy (RE) assets. NTPC also ran a process for partial minority stake sale in NGEL. However, despite some participation, the stake sale strategy could not materialise due to various reasons," said Jaikumar Srinivasan, director (finance) at NTPC Ltd, in an interaction with investors post the company's Q4 result announcement.

This comes more than a month after Malaysia's Petroliam Nasional Berhad (Petronas) withdrew its offer for a 20 percent stake in NGEL.

"But going ahead, we have distinct plan of either going for IPO route or some kind of strategy sale initiative very soon. This is very much on card considering the fast pace of expansion we are expecting in the RE space for which money will be needed. It will also help to unlock our RE business," he stated.

NTPC reported a six percent drop in overall net profit at Rs 4,871.55 crore for the March quarter, against Rs 5,199.55 crore in the year-ago period. Overall income grew to Rs 44,745.74 crore in the quarter, up from Rs 37,724.42 crore the corresponding quarter previous year.

On March 17, the Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, granted exemption to NTPC Ltd, India's largest power generating company and a Maharatna PSU, for making an investment in its green energy subsidiary. The CCEA also exempted NGEL’s investment in NTPC Renewable Energy Limited (NREL) and its other subsidiaries subject to a ceiling of 15 percent of its net worth beyond the monetary ceiling of Rs 5,000 crore to Rs. 7,500 crore.

NTPC Group recorded the highest ever annual generation of 399 billion units in FY23 as compared to 361 billion units in FY22, an increase of about 11 percent, according to the company. Standalone gross generation in FY23 is 344 billion units as compared to 310 billion units in the previous year, registering an increase of nearly 11 percent.

The country is aiming to reach 500 GW of non-fossil energy capacity by 2030. NTPC, through this investment in the RE sector, aims to add 60 GW of RE capacity by 2032 which will help the country in achieving its 500 GW target and move towards the larger aim of having ‘Net Zero’ emissions by 2070. The enhanced target is in line with the government’s Panchamrit recently announced at COP 26 Summit as India’s contribution to climate action towards ‘Net Zero’.