After the success of the listing of renewable energy financing firm Indian Renewable Energy Development Agency (Ireda), state-run power major NTPC is likely bring out an initial public offer for its fully owned subsidiary NTPC Green Energy Limited (NGEL) to mobilise resources for green projects.
The department of investment and public asset management (DIPAM) has approved an NTPC proposal in this regard to go ahead with the NGEL IPO, sources said. The IPO could hit the market in the next financial year.
The proceeds of the stake sale in the IPO would be used by NGEL for its green and energy transition projects including in the areas of green hydrogen, energy storage technologies, etc.
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NTPC’s share price, which was hovering around Rs 162 in February 2023, was at a 52-week high of Rs 325.7 on January 29. On Tuesday, NTPC share price closed at Rs 315.45, down 2.83% from the previous closing price. The government owns 51% of the fossil-renewable power major.
On January 30, NGEL signed a pact with the Maharashtra government for development of green hydrogen and derivatives (green ammonia, green methanol) of up to 1 million tonne capacity per annum, including pump hydro projects of 2 GW and development of renewable energy projects with or without storage up to 5 GW in the state.
NTPC is in the path of building up an RE capacity of 60 GW by 2032. NGEL aims to be the flag bearer of NTPC’s renewable energy journey with an operational capacity of over 3.4 GW and 26 GW in the pipeline including 7 GW under implementation.
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NGEL has recently signed a MoU for the blending of green hydrogen in the gas networks of the Gujarat State Petroleum Corporation (GSPC) and green hydrogen mobility by setting up green hydrogen fuelling stations in Gujarat. It also aims to explore Pipavav Port as an anchor port by NGEL for exploration, development and operations of offshore wind farms in Gujarat.
NGEL was incorporated in April 2022 as a wholly-owned subsidiary of NTPC. Ireda IPO was a success in November. As against the issue price of Rs 32, the share prices were almost appreciated 100% to Rs 60/share on the day of listing on the exchanges on November 29, 2023.
Ireda stock is now priced by the market at Rs 173, 5.4 times higher than the issue price. India has a $10.1 trillion funding gap to meet its net zero commitment by 2070.