NEW DELHI (Reuters) – India’s largest power company NTPC (NTPC.NS) is looking to sell a 20 percent stake in a green energy business this year for a deal of up to INR 30 billion (363.97 million). US dollars). three government sources said.
The deal is the first green deal by an Indian state-owned enterprise that has drawn interest from investors including the Canadian Pension Plan Investment Board (CPPIB), Malaysia’s Petronas and Brookfield.
The decision to sell a 20% stake to strategic investors will be followed by an initial public offering of NTPC Green Energy Ltd (NGEL) in the next financial year, two senior government officials with direct knowledge of the matter said.
India’s renewable energy sector is one of the country’s top five industries that has attracted the highest level of foreign investment this year. According to data from the Indian Ministry of Commerce, from April to September 2022, the share of total foreign direct investment inflows rose to 5% from 3.3% in the same period last year.
NTPC originally planned to raise capital through an IPO. A third source said the company is now considering selling his 20% stake first through a private placement to provide an IPO valuation. The size of the stock sale and transaction value were not previously reported.
The NTPC did not respond to a request for comment.
NTPC plans to invest more than Rs 2.5 trillion over the next 10 years, increasing the share of non-fossil energy in its portfolio from the current 9.41% to 45%. The remaining capacity is coal-fired.
Sources said the company is ready to sell a total of 49 percent stake in its green energy division in a tranche.
“The proposal has been moved by the Ministry of Electricity for consideration by the Federal Cabinet. The share sale is targeted for the current financial year,” said one of the sources.
The Indian fiscal year starts on April 1st and runs through March.
To test investors’ willingness to issue shares, NTPC filed a letter of intent to sell a minority stake in NGEL in September. His 13 bids came from investors such as ArcelorMittal, his NIIF in India and his TAQA listed in Abu Dhabi.
NTPC Green Energy will power the parent company’s non-fossil businesses. The company is committed to adding 60 GW of renewable energy to the group’s 130 GW capacity by 2032.
On Tuesday, the company announced it had surpassed 1 gigawatt of annual capacity in its renewable energy sector.
NTPC has said it has no plans to launch new coal-based projects, but is considering several expansion projects at its existing Pithead plant. The total NTPC capacity is 70.7 GW.
Having set a target of net zero by 2070, India has committed to achieving 50% of its cumulative installed electricity capacity from non-fossil fuel-based energy sources by 2030.
The country is targeting 500 gigawatts of renewable energy generation by 2030. Renewable energy sources, including wind, hydro and biomass, account for his 30% of the country’s current installed capacity of 409 gigawatts.
($1 = 82.4250 Indian Rupees)
Reported by Sarita Chaganti Singh.Editing by Jane Merriman
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