All about NTPC Green Energy IPO to be out in FY24

• NTPC Green Energy intends to build a renewable portfolio of 60 gigawatts (GW) over the next decade.
• It intends to use the proceeds from the share sale to expand its non-fossil businesses.
• The company’s plans are aligned with the government’s target to cut its net carbon emissions to zero by 2070.

India’s largest power producer NTPC is likely to list its green energy subsidiary NTPC Green Energy on the Indian stock exchanges in FY24, after its attempts to bring in an investor fell through.

As per reports, NTPC has plans to divest 25% of its green energy arm via a public offering. In March 2023, Malaysia's Petronas had agreed to pay $460 million for a 20% stake in NTPC Green Energy, but it withdrew the bid, as per a Bloomberg report.

NTPC’s tender offer last year drew initial interest from 13 companies, including Brookfield Asset Management Inc., Canada Pension Plan Investment Board and Abu Dhabi National Energy Co.

Of these, only three companies including Petronas, Indian power lender REC and Indraprastha Gas had put in their final bids.

Building a non-fossil business
State-owned NTPC is India’s largest power generator with 25 coal fired power plants across the country. However, it plans to expand into non-fossil businesses, fundraising via an IPO will help with this expansion.

NTPC has a total commissioned solar power capacity of more than 2 gigawatts. It has put all its renewable energy portfolio under one umbrella entity — NTPC Green Energy by transferring its 15 renewable energy assets. The net worth of the assets is ₹13.65 billion as of 31 March, 2022, which is 1.01% of the net worth of NTPC.

NTPC Green sets ambitious targets
NTPC Green Energy has set an ambitious target of building a renewable generation portfolio of 60 gigawatts (GW) over the next decade.

The company’s plans align with the government’s target to cut net carbon emissions to zero by 2070. India is also aiming to build 500 GW of non-fossil energy capacity by 2030.

Last month, NTPC Green Energy signed a joint venture agreement with Indian Oil Corporation to set up renewable energy projects to meet round the clock power requirements of IOCL Refineries. The JV will enable NTPC and IOC to meet the government’s clean energy targets in their respective core businesses.

In March, the cabinet committee on economic affairs granted exemption to NTPC to invest more than the prescribed limit in its green energy subsidiary, NTPC Green Energy.

“The exemption given to NTPC will aid in improving India’s global image as a green economy. It will also decrease India’s dependency on conventional sources of energy by diversifying India’s energy generation and will also decrease the country’s coal import bills. Further, it will also help in ensuring 24*7 power supply to each and every corner of the country,” said the cabinet committee on economic affairs in a statement.

The last public sector company that went public was Life Insurance Corporation (LIC) in 2022. It was also India’s largest IPO which raised as much as ₹21,000 crore.

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