Tata Power’s board of directors has approved raising up to Rs 5,500 crore via private placement of secured non-convertible debentures (NCDs) to corporates, banks or financial institutions.

The funds, to be raised in one or more tranches, will be used to refinance the existing loans, the company said after its board meet for the January-March 2021 quarter results.

Higher losses due to increase in coal prices at Coastal Gujarat Power, the loss-making ultra mega power project, has led to 19% year-on-year (y-o-y) decline in the operating profit of Tata Power in the January-March quarter of 2021. Operating profit or Ebitda fell to Rs 1,445 crore from Rs 1,779 crore in the same quarter last year.

Operating margins fell by 1,261 basis points on-year to 14.27% in the quarter. However, revenue for Q4FY21 was up by 53% on higher income from the acquisition of Odisha Discom and higher execution of solar projects.

Profit after tax for the quarter was marginally higher by 1.34% to Rs 181 crore on savings in finance cost, offset by exceptional gains in the previous year. Finance cost for Q4FY21 fell to Rs 890 crore from Rs 1,090 crore a year ago.
Fuel cost fell to Rs 2,312 crore from Rs 2,426 crore a year ago. Cost of power purchased, however, rose to Rs 2,773.44 crore from Rs 1,288.70 crore a year ago.

Praveer Sinha, CEO and MD, Tata Power, said the company is anticipating significant growth in the solar sector under Atmanirbhar Bharat and they have planned various developmental initiatives to grow their solar business. “…we also aim to serve our B2B consumers with enhanced value-added energy management services. The company has begun investing in start-ups to speed up its innovation pipeline to help develop Smart Energy Management offerings,” he said.

“We will continue to concentrate on our key growth areas – renewables, distribution business and new businesses of rooftop solar panels, solar pumps and EV charging and push the bar on performance through all our entire gamut of generation, transmission and distribution businesses,” Sinha added.