Renewables transfer by India's NTPC intensifies stake sale speculation

Indian state-run energy company NTPC Ltd (BOM:532555) has approved the transfer of NTPC Renewable Energy Ltd (NREL) along with 15 renewable energy assets to a new wholly-owned subsidiary, amid market rumours about a possible stake sale in the green power business.

In a bourse filing on Saturday, NTPC said it had signed agreements for these divestments to NTPC Green Energy Ltd (NGEL) on July 8. The document shows that the revenue generated by the renewable energy assets and the NREL entity in fiscal 2022 reached INR 9.17 billion (USD 115.8m/EUR 113.9m) and INR 7.8 million, respectively.

The amount contributed by the renewable energy assets equals 0.68% of NTPC’s consolidated revenue as of March 31, 2022, the group noted. The net worth of the 15 plants is estimated at INR 13.65 billion as of the same date.

NTPC said it will receive a consideration of INR 100.67 billion for the plants and INR 7.3 billion for the NREL equity.

The newly-announced transfers were predicted by media reports in early May, while today, The Economic Times quoted people aware of the matter as saying that NTPC is getting ready to sell a stake in the newly-created green energy arm for INR 50 billion.

According to said report, NTPC has appointed SBI Capital Markets as a consultant on a sale process that could launch in October. The ET also mentioned that the potential energy generation capacity of the assets being transferred amounts to 2.5 GW.

(INR 1 = USD 0.013/EUR 0.012)

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