NTPC Plans to Raise Rs 5000 Crore From Sale In Renewable Firm Continues On Track

State-owned National Thermal Power Corporation (NTPC) plans for a stake sale in its green arm in October this year seem to be moving on schedule. The power giant plans to raise upto Rs 5,000 crore through a stake sale while retaining control over the firm.

The power major has begun to collect inputs from sovereign wealth funds across Canada, UAE and Kuwait. The purpose behind this initiative is to achieve the government’s project of India’s National Monetisation Pipeline (NMP) which has assigned various ministries the targets to raise funds through monetisation of those assets of public sector undertakings falling into their fold. The thermal power company currently contributes one-fourth of the country’s electricity generation capacity and is striving to expand its portfolio to renewable sources from the current mainstay of coal-based power. Besides that, the healthier valuations for renewable assets now, as seen by the deal closed by Tata Power for its renewables arm recently also is a major factor, no doubt.

With this announcement, it will be imperative to keep the flock of investors together even as NTPC has confirmed hive off of 15 of its renewable energy projects into NTPC Green Energy Ltd- a newly formed entity for renewable energy projects. The book value of the assets being separated is Rs 10,000 crore. Along with this,  it has confirmed the transfer of 100% equity shareholding held in NTPC Renewable Energy Limited (“NREL”), a wholly owned subsidiary of NTPC, to NGEL (NTPC Green Energy Limited) through a share purchase agreement dated July 08, 2022.

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The potential energy generation capacity of the assets being transferred is around 2.5 GW. A report in May had said that NTPC is looking to sell a stake in its subsidiary NTPC Green Energy and raise about Rs 2,000 crore from the sale. This sale is anticipated by October. In October, 2020, NTPC had said that it aims to develop 60 GW of renewable energy in this decade. In December, 2020, it was reported that the company would reduce its stake in its renewable arm to below 50 percent.