By Manish Gupta
State-run NTPC has dropped the plan to rope in Malaysian energy giant Petronas as a strategic investor in its green energy subsidiary before its listing.
NTPC Green Energy (NGEL) will hit the market with an initial public offering (IPO) in the current fiscal with a plan to divest 25% of its stake. The stake sale to the public would be through the book building route.
The state-run power company had late last fiscal got the government’s approval for inducting a strategic investor in NGEL.
The country’s largest power producer, which is focusing big on the green energy business, changed its strategy on funding NGEL, as it did not find the Petronas offer much attractive, an official source said, on condition of anonymity. NTPC has already transferred 15 of its renewable energy assets of 2,861 MW.
Malaysian energy group Petroliam Naisonal Berhad (Petronas) had outbid Indian firms REC and Indraprastha Gas (IGL) with its $460-million offer for a 20% stake in NGEL last year. But withdrew after NTPC began negotiations for better offer, the official said.
Besides, the government’s approval for NTPC, a Maharatna, making an investment beyond a prescribed limit in NGEL came late last fiscal on 17 March 2023 on the ground that it aims to achieve a target of 60 GW renewable energy capacity.
The official said that the NTPC will require a lot of equity to grow to 60 GW of renewable energy capacity. However, the market for renewables is opening up and growing fast, he said, adding that the NGEL’s public offering may give much a better valuation.
In line with its commitment in COP 26, India is working towards a low-carbon emission path while meeting its development goals. It is aiming to reach 500 GW of non-fossil energy capacity by 2030, which is part of the country’s larger aim of moving towards ‘net zero’ emissions by 2070.
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Power secretary Alok Kumar, earlier this month, said that the country needs to more than double its renewable energy production to achieve its goal of 90% of its energy coming from renewable sources by 2047. Currently, coal accounts for 70% of India’s electricity output.
As India’s leading power utility, NTPC aims to add 60 GW renewable energy capacity by 2032, or half of its total capacity then, target for which is set at 130 GW. NTPC transferred its unit NTPC Renewable Energy (NREL) to NGEL to consolidate its renewable energy portfolio.
NGEL, along with its subsidiary NREL, aims to be the flag bearer of NTPC’s renewable energy journey with presence in green hydrogen, solar and wind.