State-run hydropower company NHPC Ltd plans to raise its total installed capacity to 23 gigawatt (GW) by 2032 from its current capacity of 7.2 GW. By 2047, the company aims to increase the total capacity to more than 50 GW, the company’s Chairman and Managing Director Raj Kumar Chaudhary tells Arunima Bharadwaj in an interview. The company is optimistic of increasing its net profit to Rs 4,500 crore in the next financial year 2025-26. The company reported a decline of 37% on year in consolidated net profit to Rs 1,069.28 crore in the second quarter of the current financial year. Excerpts:
What are the company’s upcoming projects and when do you plan to commission these?
Currently, we are operating 28 power stations with a total installed capacity of 7.2 GW. Additionally, 15 projects with a combined capacity of 10,604 MW are under various stages of construction. Out of these, we aim to commission the 800 MW Parbati-II HE Project by March 2025 and three units of 250 MW each of the 2000 MW Subansiri Lower HE Project by May 2025. Upon completion, these projects will collectively contribute an additional 6,500 million units in electricity generation in the next financial year.
The commissioning of the Parbati-II HE project will not only increase our installed capacity by 800 MW but will also enhance generation from the Parbati-III Power Station. This is because water from Parbati-II will move to the Parbati-III reservoir, which will increase generation by more than 1,200 million units annually.
Total investment in Parbati-II project is Rs 11,982 crores, and Subansiri Lower we have spent around Rs 22,697 crores.
The company has planned to have a total installed capacity of more than 23 GW by 2032 and more than 50 GW installed capacity by 2047.
What is your capex target for this fiscal year and how much have you incurred so far? What is your capex target for FY26?
For the current fiscal year, our CAPEX target is ₹ 11,761 crores, out of which ₹ 6,601 crores has already been utilized till November 2024. For FY’26, the CAPEX target will be slightly lower, at approximately ₹10,000 crores, as our major projects, Parbati-II and 3 units of Subansiri Lower, will be commissioned in next FY.
How do you plan to diversify your business?
We are already started diversifying our business into other renewable energy sectors like solar, wind, pump hydro storage projects and green hydrogen. NHPC is not only developing renewable energy projects as a developer but is also facilitating the development of renewable energy as a ‘Renewable Energy Implementing Agency (REIA)’. NHPC has been designated by MNRE as one of the Renewable Energy Implementing Agencies (REIA) with bidding target of 10 GW annually. NHPC has already achieved its targets till now as per the bidding calendar.
Additionally, NHPC has been nominated as BESS Implementing Agency (BIA) and BESS capacity of 1500MWh has been allocated to NHPC under the CPSU component. Accordingly, actions have been started by NHPC to facilitate the development of 1500 MWh BESS capacity through selection of developer.
NHPC has also taken initiatives for development of Green Hydrogen Technology, wherein one 25 KW capacity Pilot Green Hydrogen Project at Leh, and 2 pilot green hydrogen-based e-mobility projects (one at Kargil, and another at Chamba, Himachal Pradesh) are under implementation. NHPC is further planning to scale up the capacity for development of Green Hydrogen in a systematic manner based on the learnings from above pilot projects.
Does the company plan to raise funds?
For projects under construction and various stages of approvals, we will do equity investment from our internal accrual. And for the loan part, we will raise loans from various financial institutions. We have a very sound debt to equity ratio. Our present ratio is 0.84. It will be very easy for us to raise funds from financial institutions like REC, PFC, LIC.
We are also raising a loan fund from a Japanese bank. From the Japanese bank we are getting loan at a cheaper rate.
Recently we had planned to raise Rs 6,700 crore to fund our Subsidiary Company’s construction projects in Jammu and Kashmir. It has not been finalized but our JV company floated the tender and they have received offers from J&K bank, REC and PFC. Based on the interest rate, they will place an offer for funding. They are going to finalise and place orders in the next 1-2 months. Lowest interest rate is from J&K Bank at around 8% and they will try to get a balance loan portion from PFC, REC.
This financial year, we have a monetisation target of Rs 2,000 crore for Dulhasti Power Station located in J&K. Against this, realization of approx. Rs. 2,348 crore is expected soon. The funds released from monetization of the project will be used for funding the equity portion of our project.
What are your plans regarding NHPC Renewable Energy Ltd? Do you plan to list the company anytime soon?
Presently, most of the Renewable Energy business is being taken up through NHPC and we are in the process of transitioning these RE businesses to NHPC Renewable Energy Ltd. As such, listing of NHPC Renewable Energy Ltd shall be considered once the company conceives a sizable portfolio.
What are your prospects regarding the company’s financial growth? What are your projections for the company’s profitability this financial year and the next?
During the current financial year, we envisage that our profit will almost be in the same range as it was in the last fiscal. But during next financial year, we envisage substantial increase from our revenue from operations and enhancement of profitability also. Presently, our net profit is in the range of Rs 3,500-3,600 crore so during this year, we are hoping to maintain the same profitability. But in FY26, we are hoping to enhance net profit to more than Rs 4,500 crore given commissioning of new projects.