Friday, June 24, 2022

NTPC looking for strategic investors for its green subsidiary NREL before IPO

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  • NTPC is looking to rope in reputed global investors in NREL, which will also make NREL more attractive for an IPO, said a source
  • NTPC is also planning to list NEEPCO and NTPC Vidyut Vyapar Nigam Ltd (NVVNL) and sell its stake in NTPC-SAIL Power Company Ltd (NSPCL) by March 2024

New Delhi: State-run NTPC Ltd is looking to bring in strategic investors on the board of its wholly-owned, clean energy subsidiary, NTPC Renewable Energy Ltd (NREL), ahead of its planned listing on the bourses in October 2022, said a source close to the development. The Maharatna power PSU has set a divestment target of Rs 15,000 crore for the next three years, under which it is planning to float Initial Public Offerings (IPOs) of some of its subsidiaries. The IPO of NREL, which is likely to hit the markets next year, is part of the divestment plan. In addition, NTPC is also planning to list NEEPCO and NTPC Vidyut Vyapar Nigam Ltd (NVVNL) and sell its stake in NTPC-SAIL Power Company Ltd (NSPCL) by March 2024, said the source.

NTPC wants to rope in global investors in NREL before IPO

The source said that NTPC is looking to rope in reputed global investors in NREL, which will also make NREL more attractive for an IPO. Explaining the rationale behind the plan, the source said, “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.” 

While the equity component of NREL would be around Rs 50,000 crore, the remaining capital would be generated from financial instruments like long-term loans, debentures and bonds, the source added. NTPC has plans to set up 60 GW of renewable energy (RE) capacity by 2032, which would be around 45 percent of its overall target of putting in place 132 GW of power generation capacity. However, to execute this RE capacity addition plan, NTPC would require an investment of around Rs 2.5 lakh crore.

NTPC had incorporated NREL in October 2020 to focus on its green energy business. Its IPO is expected to unlock significant value.

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