NTPC Green Energy IPO plans to construct a 60-GW renewable portfolio over the next decade. It plans to develop its non-fossil companies using share sale earnings. The corporation supports the government’s 2070 net carbon emission reduction goal.
NTPC Green Energy IPO
The biggest power producer in India, NTPC, is probably going to list NTPC Green Energy, its green energy business, on Indian stock markets in FY24, after the failure of its efforts to secure an investor. NTPC is to use a public offering to sell off 25% of its green energy division, according to reports.
According to a 20% share in NTPC Green Energy, which had been agreed upon for $460 million in March 2023. Thirteen firms, including Brookfield Asset Management Inc., Canada Pension Plan Investment Board, and Abu Dhabi National Energy Co., first expressed interest in NTPC’s tender offer from the previous year.
The entire installed solar power capacity of NTPC exceeds 2 gigawatts. It transferred its fifteen renewable energy assets under one roof, NTPC Green Energy, to house its entire renewable energy. The assets’ net value as of March 31st was ₹13.65 billion, or 1.01% of NTPC’s total net worth.
NTPC Green Sets Ambitious Targets
The company’s goals coincide with the government’s objective of achieving net-zero carbon emissions by 2070. By 2030, India also wants to have 500 GW of non-fossil energy capacity built.
A joint venture deal between NTPC Green Energy and Indian Oil Corporation was struck last month to establish renewable energy projects that would fulfill the IOCL Refineries’ continuous power needs.
Through the JV, NTPC, and IOC would be able to fulfill their respective clean energy objectives in their core industries. The cabinet committee on economic affairs permitted NTPC to spend more in its green energy business, NTPC Green Energy, than was allowed in March.
Key Features of the Green Energy IPO
The goal that NTPC Green Energy has set for itself is to accumulate 60 gigawatts (GW) of renewable energy in the next ten years.
- Funding Renewable Energy Projects: The primary objective of the Green Energy IPO is to raise funds for NTPC’s renewable energy initiatives. The capital generated through the IPO will be channeled into solar, wind, and other clean energy projects, enabling NTPC to diversify its energy portfolio and contribute to India’s renewable energy targets.
- Size and Scale: The Green Energy IPO is poised to be one of the largest offerings in the renewable energy sector. The sheer scale of this IPO reflects not only the commitment of NTPC to green energy but also the growing investor interest in sustainable ventures.
- Long-Term Sustainability: By investing in NTPC’s Green Energy IPO, investors are not merely seeking short-term gains. They are aligning themselves with a company committed to long-term sustainability and contributing to the global shift towards cleaner energy sources.
NTPC Green Energy Plans IPO
According to a source, the state-owned power firm NTPC’s subsidiary NTPC Green Energy Ltd. (NGEL) intends to raise money via an IPO this fiscal year. NTPC owns all of NGEL as a subsidiary. It had previously intended to sell a strategic investor Rs 3,000 crore for 20% of the NTPC’s ownership in NGEL.
The Union Cabinet permitted NTPC to invest more in NGEL in March 2024 than the maximum of thirty percent of its net assets. The NTPC’s annual report for the financial year 2021–22 states that the company’s net value was Rs 1.28 lakh crore. By 2032, NTPC hopes to achieve its lofty goal of 60 GW of renewable energy.
To help parent company NTPC Ltd. reach its goal of 60 gigawatts of renewable energy capacity, the Union Cabinet also exempted the NGEL’s investment in NTPC Renewable Energy Ltd. and its other joint ventures/subsidiaries, subject to a ceiling of 15% of its net worth above the financial ceiling of Rs 5,000 crore to Rs 7,500 crore.
NTPC Green Energy to invest ₹80,000 Cr
As part of the Maharashtra government’s five-year green investment strategy, a memorandum of understanding (MoU) has been inked. The Union Ministry of Power released a formal statement stating that the deal envisions a possible investment of around ₹80,000 crore.
The energy supplier said that by 2032, it wants to have 60 GW of renewable energy capacity built. The current move by NTPC to diversify into renewable energy projects is a response to India’s aspirations to expand its economy in a less carbon-intensive manner.