I think from the offs side, this is a completely fresh issue for 10,000 crores. The complete 10,000 crores, so this is the dilution which is happening. All the new shares will be issued, and this is to meet our capital requirement and further going forward for the transition. As you know, NTPC is the largest power generating company. I'm told every time that whenever there is power, NTPC just comes instantly in their mind. Similarly, going forward, whenever there will be green power, I think NTPC Green Energy will come to this, and that is what our ambition is. We have already chalked out programs to go up to 60 GW by 2032. This is what we had declared almost about two and a half years back. Today, when the storage prices are coming down, we believe that we will be able to achieve that before 2032 rather than waiting up to 2032. So this public offer is to raise only 10,000 crores at present, and depending on the requirement of the capex and as per the guidelines of this AB, we will be required to dilute up to 25% in three years.
So what is the plan for the 10,000 crore rupees? How do you plan to use the proceeds from the IPO?
The proceeds of this 10,000 would be essentially for filling our capital expenditure. It's almost 19 GW in the next three and a half years. However, intermittently we may use the proceeds also to retire some of the costly loans temporarily, but broadly speaking it is meant for capital expenditure.
So right now, if you could give us a sense of debt to equity pre and post IPO. What is it now and post the IPO what would it look like?
The present debt equity is 1.91. However, we will be implementing all this with a debt equity ratio of 80:20, so leveraging 1 is to 4. At present we are quite comfortable, but our growth plans are also very aggressive. As of today, we are having only 3.3 GW (3300 megawatt) operational, whereas we have more than 11 GW (11,000 megawatt) under construction. So we are commissioning 3,000 megawatt in this financial year (up to March), 5,000 megawatt in next financial year, and another 8,000 megawatt in FY 26-27. So by FY 27 we should be having 19 GW or 19,000 megawatt.
That was actually my next question. I know that this is the kind of capex requirement which is going to go forward, and that is the reason Director Finance just mentioned that it will be temporarily if there is some kind of loan repayment. But going forward we will be requiring more and more capex on that.
We are going to play a very, very important role in the energy transition. As you know, NTPC supplies almost one-fourth of the electricity to the entire country. We have pan India presence. Similarly, NTPC Green Energy will be playing a similar role. It will be a leading green energy company which will have a footprint almost everywhere. But to start with, what we are doing is focusing on the areas where there is maximum potential for solar and wind, which is like Gujarat, Rajasthan, Andhra Pradesh, Telangana. These are the states where we started, but going forward we will be going almost across the country wherever there is potential, whether for solar or wind. But more importantly, there are two other important things: storage solutions, because solar is only during the daytime. When the sun sets and there are off-solar hours, there is a requirement of storage solution for round the clock, or at least for the peak requirement. Round the clock is the next thing. So to meet the peak requirement and to have grid stability during the day when there is excess solar, there will be capex requirement for storage solutions. We are working on that also. And going forward, there will be another important segment, the fourth segment, called the green molecule. Green molecule is green hydrogen and green hydrogen-based derivatives. The derivatives are green methanol, green ethanol, and then going forward there will be sustainable aviation fuel. Those kinds of things will be taking place. Let me add here that about 10 years back, when solar started and when the first megawatt was commissioned in Gujarat, there was some apprehension in the minds of many people about what is going to happen. Today everybody is accepting very well and everybody has joined this momentum. Similarly, going forward, there will be storage solutions as well as green molecule solutions.
So you said that till 2027 the plan is for 19 GW. What does FY 27 mean? FY 27 we will be having 19 GW commissioned, but that does not mean only 19 GW. There is work which is going on continuously, and what we intend is that what we had said about the 60 GW by 2032, we should be in a position to commission that before that. That's what.
But in terms of capex, what does it translate into absolute numbers? How much of capex?
Let me give to the Director Finance exact numbers, but let me give you some ballpark figures. What you require for per megawatt of solar and per megawatt of wind. Our strategy is to have almost 90% solar and 10% wind. As far as solar is concerned, it takes approximately 5 crore per megawatt. There is a difference of AC and DC, but you can say with a kind of 28-29% CUF, the capex requirement is around 5 crore per megawatt. For wind, it is approximately 8 crore per megawatt. So if you put together, this is going to cross 3 lakh crores, meaning 3.25 lakh crores for the 60 GW going forward. That itself is only solar plus wind. Then there will be storage component and then there will be a green molecule component. So as we go along, our requirement will go on increasing because we have to go aggressively on this and we have to really work towards this transition. The 500 GW by 2030 target which has been announced by the government, we have to play a very important role in that, and further 2070 which is net zero. So put together, our contribution will be quite significant to that.
Well, a very important conversation there with NTPC Green Energy. The IPO opens on November 19th and the implied market cap of close to 91,000 crores. Well with that, it's a wrap on this edition of Half Time Report. Business Lunch will take all the action ahead.
We will require more and more capex as we play a very important role in the energy transition. NTPC supplies almost a quarter of the country's electricity and has a pan-India presence. Similarly, NTPC Green Energy will lead the green energy space with a footprint everywhere. We are focusing on areas with maximum solar and wind potential like Gujarat, Rajasthan, Andhra Pradesh, and Telangana, but will expand across the country. Additionally, we are working on storage solutions to address the intermittency of solar, and on green molecules such as green hydrogen, green methanol, green ethanol, and sustainable aviation fuel. Ten years ago, when solar started, there was apprehension, but now everyone has joined the momentum. The same will happen with storage and green molecules.
So you said that until 2019 the plan is for 19 GW? What does that mean? By FY27 we will be having 19 GW commissioned?
By FY27 we will have 19 GW commissioned, but that does not mean only 19 GW. Work is ongoing continuously, and we intend to commission the 60 GW target by 2032 before that date. In terms of capex, let me give you ballpark figures. Our strategy is 90% solar and 10% wind. Solar requires approximately 5 crore per megawatt (with 28-29% CUF), and wind requires about 8 crore per megawatt. So for 60 GW, the capex will cross 3 lakh crore, around 3.25 lakh crore, just for solar and wind. Then there will be storage and green molecule components. Our requirement will increase as we aggressively pursue this transition to meet the government's 500 GW by 2030 target and net zero by 2070. Our contribution will be significant.
So what is the plan for the 10,000 crore rupees? How do you plan to use the proceeds from the IPO?
The proceeds of this 10,000 crore will be essentially for funding our capital expenditure, which is almost 19 GW in the next three and a half years. However, intermittently we may use the proceeds to retire some costly loans temporarily, but broadly it is meant for capital expenditure.
Right now, if you could give us a sense of debt to equity pre and post IPO. What is it now and what would it look like post IPO?
The present debt equity is 1.91. However, we will be implementing all this with a debt equity ratio of 80:20, so the ratio is 1:4. At present we are quite comfortable, but our growth plans are very aggressive. As of today, we have only 3.3 GW operational, but we have more than 11 GW under construction. We are commissioning 3,000 MW this financial year (up to March), 5,000 MW next financial year, and another 8,000 MW in FY 2026-27. So by FY27 we should be having 19 GW.
Our requirement will go on increasing as we go along because we have to work aggressively towards this transition. The government has announced 500 GW by 2030, and we have to play a very important role in that, and further to 2070, which is net zero. Our contribution will be quite significant. There is nothing from the offer side; this is a completely fresh issue for 10,000 crore rupees. All new shares will be issued to meet our capital requirement and for the transition. NTPC is the largest power generating company. I'm told every time that whenever there is power, NTPC comes instantly to mind. Similarly, going forward, whenever there is green power, NTPC Green Energy will come to mind. That is our ambition. We have already charted out programs to go up to 60 GW by 2032, which we declared about two and a half years back. Today, with storage prices coming down, we believe we will achieve that before 2032. This public offer is to raise only 10,000 crore at present, and depending on the capex requirement and as per the guidelines of this AB, we will be required to dilute up to 25% in three years.
So what is the plan for the 10,000 crore rupees? How do you plan to use the proceeds from the IPO?
The proceeds of this 10,000 crore would be essentially for fueling our capital expenditure. It's for almost 19 GW in the next three and a half years. However, intermittently we may also use the proceeds to retire some costly loans temporarily, but broadly speaking it is meant for capital expenditure.
Right now, if you could give us a sense of debt to equity pre and post IPO, what is it now and what would it look like?
The present debt equity is 1.91. However, we will be implementing all this with a debt equity ratio of 80:20, so the gearing is 1:4. At present we are quite comfortable, but our growth plans are also very aggressive. As of today, we have only 3.3 GW – 3,300 megawatt – operational, whereas we have more than 11 GW – 11,000 megawatt – under construction. We are commissioning 3,000 megawatt in this financial year up to March, 5,000 megawatt in the next financial year, and another 8,000 megawatt in FY 2026-27. So by FY27, we should be having 19 GW or 19,000 megawatt.
That was actually my next question. I know that this is the kind of capex requirement going forward, and that is the reason Director Finance just mentioned that it will be temporarily used for loan repayment if needed. But going forward, we will be requiring more and more capex. We are going to play a very important role in the energy transition. As you know, NTPC supplies almost one quarter of the electricity to the entire country. We have pan-India presence, so similarly, NTPC Green Energy will be playing a similar role, leading the green energy company with a footprint everywhere. To start with, we are focusing on areas with maximum solar and wind potential, like Gujarat, Rajasthan, Andhra Pradesh, Telangana. But going forward, we will be going across the country. More importantly, there are two other important things: storage solutions and green molecules. As you know, solar is only during daytime sunshine, so we need storage for round-the-clock or at least peak requirement. Round-the-clock is the next thing. We are working on storage solutions. The fourth segment is green molecules – green hydrogen and its derivatives like green methanol, green ethanol, and sustainable aviation fuel. Let me add that about 10 years back, when solar started and the first megawatt was commissioned in Gujarat, there was apprehension in many people's minds. Today, everybody is accepting it and has joined this momentum. Similarly, going forward, there will be storage and green molecule solutions.
So you said that by FY27 the plan is for 19 GW. What does that mean?
By FY27, we will be having 19 GW commissioned. But that does not mean only 19 GW; there is work going on continuously. What we intend is that we should be in a position to commission the 60 GW by 2032 before that date.
