NTPC Green Energy IPO: Management Shares Roadmap On Capacity Addition, Move To Green Hydrogen Derivatives

The top brass of NTPC Green Energy Ltd., which is set to launch its initial public offering next week, expects the company to achieve its target of 60 gigawatts of capacity addition before 2032.

Gurdeep Singh, the chairman and managing director of NTPC Ltd., shared a roadmap of the renewable energy arm's capacity addition plan while speaking to NDTV Profit on Wednesday.

"As of now, we have only 3.3 GW of commissioned capacity. At the same time, we have a huge capacity of 11 GW under construction. This fiscal year, we will add 3 GW, next year 5 GW, followed by 8 GW in fiscal 2027. And going forward, we will be ramping up this capacity," Singh said.

"We will be reaching the 60-GW target in all likelihood before 2032," he added.

Although NTPC Green Energy is currently focused on solar and wind energy, the company will also turn its attention to green hydrogen derivatives in the period to come, the management indicated.

"Going forward, the focus will be not just on solar and wind energy but also storage solutions and green molecules," Singh said.

Further explaining the plan, the NTPC Green Energy chief said the focus will not be on green hydrogen but its derivatives, which include ammonia, methanol, reduced iron, and steel.

"The potential for this transformation is immense. Once we go through this transition, the growth will be much higher than what is seen today," Singh added.

Green hydrogen derivatives will not only fuel the company's growth plans but will also play a leading role in meeting the country's future energy requirements, Singh said. "This will help us play a crucial role in the Viksit Bharat goal for 2047."

Singh noted that NTPC Green Energy has already commissioned its first green methanol plant at the Vindhyachal Super Thermal Power Station. "There, we are capturing carbon dioxide from the stack of thermal plants and utilising the hydrogen for producing green methanol... This is a pilot project."

NTPC Green Energy has also signed an agreement with the Andhra Pradesh government for "developing a hydrogen hub" in the state's coastal location, he added.

Singh further noted that policy initiatives of the states and the Centre, including the National Hydrogen Mission, will be aiding the growth of India's renewable energy sector.

The Rs 10,000-crore IPO, to be open for subscription between Nov. 19 and Nov. 22, will help NTPC Green Energy to expand its renewable energy capacity, according to Jaikumar Srinivasan, NTPC's director of finance.

The IPO is being launched at a price band of Rs 102 to Rs 108 per share. At the upper end of the price band, the company's market value is seen at Rs 91,000 crore.

"This IPO will feed our capacity addition. Predominantly, it will help in adding to the capital expenditure," Srinivasan said.

The IPO proceeds will also help with debt repayment of Rs 7,500 crore, he said, adding that the current debt levels of the company stand at Rs 7,000 crore to Rs 8,000 crore. "The company needs debt of Rs 5 crore per megawatt," he underlined.

Commenting on the margins for green business, Srinivasan noted that earnings before interest, depreciation, and amortisation margin are going to be in the range of 86% to 90%.

Notably, the IPO of NTPC Green Energy comes around 20 years after the parent entity, NTPC Ltd., made its debut on the bourses.