Tata Power Company Ltd. (TPCL), India’s oldest private power producer, is working on various options for monetising some of its ‘green’ business segments. This will strengthen the balance sheet and ensure adequate capitalisation for the ambitious growth plans, says Praveer Sinha, Chief Executive Officer and Managing Director, TPCL.
Tata Power will move entire renewables business into one single platform as part of unlocking value, where it will rope in strategic investors. It is targeting debt reduction from Rs 39,719 crore to around Rs 25,000 crore.
Tata Power has installed generation capacity of 12,321 megawatt (MW) in India. The thermal power generation capacity stands at 6,880 MW, while generation through clean sources such as hydro, solar and wind is 3,948 MW. Green power generation capacity is 32% of its portfolio.
TPCL plans to phase out coal-based capacity and expand clean and green capacity to 80% by FY30. The company wants to build an ‘asset light’ business by scaling up customer businesses and growing renewable capacities, says Sinha.
Sinha says the company is transforming its model from B2B / B2G (business to government) to B2C. “We have embarked on an ambitious journey to transform the energy generation portfolio to clean and green energy and attain carbon neutrality before 2050, two decades before India's commitment to achieve the same (2070),”he says.
TPCL has chalked out a 2.0 strategy to strengthen its balance sheet. “Significant deleveraging has been achieved by divesting identified non-core investments. The company has also made significant progress in divestment of remaining non-core investments and monetisation of the ‘green’ business portfolio,” says Sinha.
“We aspire to be a utility of the future through our green offerings like EV charging, home automation, smart meters, battery energy storage systems and green power business,” he says. TPCL has 1000 EV charging points across India. It is installing over 750 MW rooftop solar capacity. It has over 160 microgrids across more than 200 villages in India and has installed 53,000 solar pumps. “We see tremendous potential in growth of solar pumps and microgrids in the immediate future,” he says. “We have also tremendously grown our power distribution business with 12 million customers across India. Additionally, we have installed nearly 2.5 lakh smart meters.”
The company has been exploring use of artificial intelligence (AI) for dispatching/ scheduling power operations in Mumbai. “We foresee great developments in battery energy storage. The company has been a pioneer in this field and has set up one of South Asia’s largest grid-scale battery energy storage system in Delhi. Additionally, the company will set up India’s first large-scale battery storage of 50 MWh with a 50 MW solar plant at Leh, Ladakh,” says Sinha.
“We took effective steps to de-leverage our balance sheet by divestment of non-core investments in FY21,” he says. The company brought down the debt to equity ratio to nearly 1.6 from over 2 and average cost of debt to nearly 7% from 8.5%. The promoters, Tata Sons, has increased shareholding from 35.27% to 45.21% after infusing Rs 2,600 crore in a preferential issuance.
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