NTPC sets for mega share sales of two clean energy subsidiaries

Industry Outlook Team | Tuesday, 17 August 2021

State-run NTPC Ltd has begun the groundwork to hold initial share sales of its units NTPC Vidyut Vyapar Nigam Ltd (NVVN) and NTPC Renewable Energy Ltd (NTPC REL), with merchant bankers making preliminary presentations, said two people aware of the development.

NVVN and NTPC REL are likely to be among the first clean energy firms to list on domestic bourses. Both are expected to play a pivotal role in helping India’s largest power generation utility reach 60 gigawatts (GW) renewable energy capacity by 2032 from around 4GW currently. NTPC plans to invest Rs 1 trillion between 2019 and 2024 to turn a 130GW power producer by 2032.

“The plan involves listing NVVN and NTPC REL. The quantum of the IPOs and their timing are yet to be decided. The merchant bankers are making preliminary presentations, post which a bid process will be called for a formal engagement," one of the two people cited above stated, seeking anonymity.

While NVVN was formed for power trading, it was

also given green energy responsibilities such as
buying solar power under the Jawaharlal Nehru National Solar Mission, creating renewable energy assets and has now made forays into electric mobility. NTPC REL, on its part, has been bidding aggressively to establish solar projects. It is presently building India’s largest solar park of 4.75GW in the Rann of Kutch in Gujarat, from where it would also generate green hydrogen on a commercial scale.

NTPC group recorded a net profit of $1.85 billion on $13.32 billion revenue in 2020-21. The group has set a target to reduce its net energy intensity by 10% as part of its energy-compact goals. The firm has an installed capacity of about 67GW across 70 projects, with an additional 18GW under construction.

NTPC’s plans underscore the government’s push towards green energy bearing fruit, with solar and wind generation hitting an all-time high of 43.1GW on 27 July. India has also crossed the 100GW milestone of installed renewable energy capacity. Additionally, 50GW is under installation, and 27GW is under tendering. This compares with the country’s total installed power generation capacity of 383.73GW.

NTPC REL has also signed a pact with the Union territory of Ladakh for a green hydrogen mobility project, with the firm along with NVVN jointly executing the project. NVVN is also the nodal agency for cross border trading of power with Bangladesh, Bhutan and Nepal. NTPC has also floated a global tender to build 1GWh grid-scale battery storage system and is also working with Hyderabad-based Greenko for “round-the-clock" power supply.

NTPC is also eyeing the power distribution space and is participating in the Union territories electricity distribution firms (discoms) privatization exercise. It lately bid Rs 563 crore to acquire the electricity distribution business for Chandigarh, with the highest bid of Rs 871 crore placed by CESC Ltd’s unit Eminent Electricity Distribution Ltd. NTPC is also interested in acquiring the electricity distribution functions of Puducherry.