NTPC plans to launch Green Energy IPO in FY25
In order to implement its goals in green energy and green hydrogen, NTPC Green Energy has plans to establish a hub across 1,200 acres of land adjacent to Pudimadaka village in the Atchutapuram mandal of Visakhapatnam, Andhra Pradesh - in line with the Government of India’s initiative for energy transition.
NTPC, India's leading power producer, aims to launch an initial public offer (IPO) for its wholly owned subsidiary, NTPC Green Energy, in the next financial year (FY25).
“We are in the process of appointing merchant bankers.. the aim is to go to the market sometime in the next fiscal year,” Mohit Bhargava, CEO of NTPC Green Energy said in an interview with CNBC-TV18.
Bhargava said the primary reason for considering an IPO is the significant need for equity in the business, "so we will have to raise equity either through internal accruals or from the markets. So we feel that we will have to go to the market at some point of time.”
The company plans capital expenditure (capex) of about ₹10,000 crore on the renewables side this year and around ₹15,000-20,000 crore next year. Bhargava said the company typically puts in about 20-25% of the amount as equity.
A Bernstein report recently noted that many renewables companies that had gone the IPO route had ended up remerging the companies with the parent entity.
Bhargava pointed out that there are reports that also suggest that there is a need to go to the market as early as possible. "If everything falls into place, if the situation is conducive, we see that we should be in the market," he added.
Amidst India’s transition and India’s commitment to going ahead and reducing its carbon footprint, NTPC Green Energy plans to have 60 gigawatt (GW) of green capacity by FY32, out of the larger basket of 400 GW of renewable capacity, which the country will have.
Along with its existing capacity, which stands at 3.5 GW, the company is working on a pipeline of close to about 25-26 GW – out of which 8 GW is under construction, another 10 GW under tendering and another 10-12 GW will be tendered out soon.
“We are on track to meet the overall target,” he said.
A lot of the capacity addition plans of NTPC Green Energy are from the solar energy segment. He believes that supplying renewable energy is the primary target. Given that globally the photovoltaic (PV) module prices coming down, the component prices coming down, one should aims to do it at the lowest cost possible.
“If there are options available today in getting the modules at a lowest cost available, we should try and leverage that at the maximum. It doesn’t mean that we should not support the domestic industry but we should also maximise the use of the low cost module availability across the globe,” he mentioned.
In terms of timelines and capacity for green hydrogen business, he said, “Out of the 60 gigawatt (GW) what we had initially earmarked was that we will have at least 5 GW of green hydrogen capacity.”
In order to implement its goals in green energy and green hydrogen, NTPC Green Energy has plans to establish a hub across 1,200 acres of land adjacent to Pudimadaka village in the Atchutapuram mandal of Visakhapatnam, Andhra Pradesh - in line with the Government of India’s initiative for energy transition.
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