NTPC scouts for strategic partner for renewable energy arm; eyes 2022 listing.

State-run NTPC is scouting for a strategic partner for its clean energy (RE) arm, NTPC Renewable Energy (NREL), to bring in not just fresh capital but also to scale up the entity’s business potential before its stock market debut, which is expected during the festival season next year.

Sources said NTPC is looking for a strategic investor for NREL before the power generator comes out with the IPO likely in October 2022. On the rationale behind the move, a source explained, “The company does not just want the capital, but is exploring for an investor who also brings in new technologies, ideas, services and products. This will help make the company more market ready.”

In the first quarter of the next calendar year, NTPC will host roadshows in India as well as in other countries to hunt for the strategic investor. The search would include power utilities, hedge funds, among others, another source revealed.

“While the equity component of NREL would be around ₹50,000 crore, the remaining capital would be generated through long-term loans, debentures, bonds among other financial instruments,” the source added.

This is also important for NTPC as it intends to have 60 GW capacity through RE sources accounting for about 45 per cent of its overall power generation capacity of 132 GW by 2032. To meet this RE capacity addition, the company would require an investment of around ₹2.5-lakh crore.

The government has ambitious plans for NREL. Incorporated in October 2020, the RE company would add around 4,000 MW of clean energy capacity in a year, which would eventually be scaled to 7,000-8,000 MW over a period of 10 years.

At present, NREL has a renewable project portfolio of 3,850 GW of which 970 MW projects are under construction and 2,880 MW projects have been won and are in different phases of implementation.

The IPO of NREL is part of the country’s largest power generator’s ₹15,000 crore disinvestment programme which is spread over the next three years. It also includes the listing of North Eastern Electric Power Corporation (NEEPCO) and NTPC Vidyut Vyapar Nigam (NVVNL) as well as diluting its stake in NTPC-SAIL Power Company Ltd (NSPCL).

NTPC Group has an installed capacity of 67,907.5 MW comprising 48 NTPC stations and 26 joint venture stations.

HBL