After NTPC Green’s Rs 10,000 crore initial public offer (IPO) by the end of 2024, SJVN Green Energy will likely follow suit by listing its subsidiary SJVN Green Energy Ltd (SGEL) to raise capital to fund its growth, sources said.
SGEL has a target of 25,000 MW of installed capacity by 2030 and 50,000 MW by 2040. The company has entered into a long-term agreement with Greenko Group-promoted AM Green Ammonia Holdings to supply 4,500 MW of carbon-free energy to its green ammonia facilities.
SGEL has also secured 1,352 MW of solar power projects in Maharashtra. Among others, SGEL and Assam Power Distribution Company Limited (APDCL) signed a joint venture and shareholders agreement to develop renewable energy projects including 1,000 MW of floating solar power projects in Assam.
While companies are channelling their retained earnings to fund their green forays, the securitization potential of debt-free assets, the new tool would be the monetization of equity stakes in green subsidiaries. “After NTPC Green Energy IPO, SGEL IPO will likely come to the market,” a senior official said.
SJVN is expected to incur Rs 12,000 crore capex in FY25, most of which are expected to be incurred for renewable capacity addition entirely through SGEL.
NTPC Green Energy Ltd (NGEL) is the subsidiary of state-run power major NTPC. NTPC is in the path of building up an RE capacity of 60 GW by 2032 and NTPC Green Energy is its flag bearer in renewable energy journey with an operational capacity of over 3.4 GW and 26 GW in the pipeline.
Department of Investment and Public Asset Management has been supportive of the energy sector CPSEs’ plans to float subsidiaries and joint ventures to take advantage of the lower corporate tax regime of 15% for new manufacturing firms set up by March 2024.
In a major thrust towards achieving the Government of India’s ambitious renewable energy capacity addition target and the goal of Net Zero by the year 2070, energy sector CPSEs are undertaking renewable projects or pooling their existing renewable assets into their new subsidiaries.
The Centre has set an ambitious target of having an installed renewable energy capacity of 500 GW by 2030.