NTPC Green Energy’s Ambitious Growth Plans Ahead of 10,000 Crore IPO

NTPC Green Energy, which is preparing for an initial public offering (IPO), is targeting a massive investment of up to ₹1 lakh crore in solar and wind energy assets by FY27. The investment will be utilised to expand its renewable energy portfolio as part of its growth strategy.

Funding Strategy and Equity Contribution

Chairman and Managing Director, Gurdeep Singh, outlined that the company expects to fund about 20% of the required ₹1 lakh crore investment through equity. This translates to an estimated need of ₹20,000 crore in equity capital. Of this, ₹10,000 crore will be raised through the upcoming IPO, with the remaining funds to be secured from internal accruals.

Debt Financing and Credit Strength

NTPC Green Energy enjoys a strong credit rating due to its affiliation with NTPC, India’s largest power producer. Singh emphasized that this robust credit profile allows the company to secure debt financing at more favourable terms compared to competitors, ensuring access to capital at softer rates.

Expansion Targets and Capacity Growth

Targeted Capacity Growth to 19,000 MW by FY27

Currently, NTPC Green Energy has an installed capacity of 3,220 MW. The company has set ambitious targets to expand its capacity to 6,000 MW by March 2025, 11,000 MW by March 2026, and 19,000 MW by March 2027. Notably, 11,000 MW of projects are already under implementation across various stages.

Solar and Wind Mix

The company plans to have 90% of its total energy capacity come from solar power, which requires an investment of ₹5 crore per MW. The remaining 10% will be sourced from wind power, which necessitates a higher investment of ₹8 crore per MW. This mix will be key to NTPC Green Energy’s strategy of driving renewable energy growth.

Capital Expenditure Outlook

₹1 Lakh Crore in Capital Investment by FY27

Singh reaffirmed that the total capital expenditure requirement for the company’s expansion will be approximately ₹1 lakh crore by FY27. The funds will primarily be directed towards scaling up solar and wind energy infrastructure to meet the company’s ambitious capacity goals.

About NTPC Green Energy IPO

NTPC Green Energy IPO is ₹10,000 crore fresh issue offer, which is scheduled to open for subscription from November 19 to November 22, 2024. NTPC Green Energy IPO allotment is expected to be finalised on November 25, 2024.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.