Director (Finance), NTPC
LIVE: NTPC Green Energy's Gurdeep Singh & Jaikumar Srinivasan in Exclusive Chat | CNBC TV18
Gurdeep Singh, CMD, and Jaikumar Srinivasan, Dir Finance of NTPC Green Energy in exclusive conversation with Rachna ...
Transcript (51 segments)
J
Jaikumar Srinivasan0:12
I think from the OFS side, this is a completely fresh issue for 10,000 crore. Yes, the complete 10,000 crore, 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 crore 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.
H
Host1:38
So what is the plan for the 10,000 crore rupees? How do you plan to use the proceeds from the IPO?
J
Jaikumar Srinivasan1:42
The proceeds of this 10,000 crore would be essentially for funding our capital expenditure. It's almost 19 GW in the next three to 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.
H
Host2:04
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?
J
Jaikumar Srinivasan2:13
The present debt-equity is 1.91. However, we will be implementing all this with a debt-equity ratio of 80:20, okay? And so the leverage ratio is 1:4. So at present we are quite comfortable, but our growth plans are also very aggressive. As of today, we are having only 3.3 GW, meaning 3,300 megawatt operational, whereas we have more than 11 GW, which is 11,000 megawatt under construction. So we are commissioning 3,000 megawatt in this financial year, meaning up to March, and 5,000 megawatt in next financial year, and another 8,000 megawatt in FY 2026-27. So by FY 2027, we should be having 19 GW or 19,000 megawatt.
H
Host3:10
That was actually my next question. I know that this is the kind of capex requirement going forward, and that is the reason the Director Finance just mentioned that it will be temporarily used for loan repayment. 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-fourth of the electricity to the entire country. We have pan-India presence. Similarly, NTPC Green Energy will be playing a similar role, becoming a leading green energy company with footprint almost 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 go across the country. More importantly, there are two other important things: storage solutions and green molecules. Storage is needed because solar is only during daytime. We need storage for round-the-clock or at least peak requirement and grid stability. We are working on that. 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, there was apprehension, but today everybody has joined the momentum. Similarly, storage and green molecules will follow.
So you said that until 2027 the plan is for 19 GW. What does 27 mean?
J
Jaikumar Srinivasan5:48
FY 2027 we will be having 19 GW commissioned. But that does not mean only 19 GW. There is work going on continuously, and what we intend is that what we had said about 60 GW by 2032, we should be in a position to commission that before that.
H
Host6:11
But in terms of capex, what does it translate into absolute numbers? How much of capex?
J
Jaikumar Srinivasan6:11
Let me give you some ballpark figures. For solar, it takes approximately 5 crore per megawatt (with 28-29% CUF). For wind, it is approximately 8 crore per megawatt. Our strategy is to have almost 90% solar and 10% wind. So for 60 GW, the capex will cross 3 lakh crore, meaning 3.25 lakh crore for solar and wind alone. Then there will be storage and green molecule components. So as we go along, our requirement will increase. We have to go 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 net zero by 2070. Our contribution will be quite significant.
H
Host7:43
Well, a very important conversation there with NTPC Green Energy. The IPO opens on November 19th and the implied market cap is close to 91,000 crore. With that, it's a wrap on this edition of Half Time Report. Business Lunch will take all the action ahead.
J
Jaikumar Srinivasan52:02
Going forward, we will require more and more capex. We are going to play a very important role in the energy transition. NTPC supplies almost one-fourth of the electricity to the entire country and has a pan-India presence. Similarly, NTPC Green Energy will be a leading green energy company with a footprint almost everywhere. To start, we are focusing on areas with maximum solar and wind potential, like Gujarat, Rajasthan, Andhra Pradesh, and Telangana. Going forward, we will go across the country wherever there is potential, for solar or wind. More importantly, there are two other crucial segments: storage solutions and green molecules. Storage is needed for round-the-clock or at least peak requirement and grid stability. We are also working on green hydrogen and its derivatives like green methanol, green ethanol, and sustainable aviation fuel. Ten years ago, when solar started, there was apprehension; now everyone accepts it. Similarly, storage and green molecules will gain momentum.
H
Host54:48
But in terms of capex, what does it translate into absolute numbers? How much of... Let me get exact numbers from the director of finance.
J
Jaikumar Srinivasan54:55
Let me give you ballpark figures for per megawatt of solar and wind. Our strategy is almost 90% solar and 10% wind. For solar, it takes approximately 5 crore per megawatt (with a capacity utilization factor of 28–29%), and for wind about 8 crore per megawatt. So for 60 GW, the total would cross 3 lakh crore, around 3.25 lakh crore for solar and wind alone. Then there will be additional capex for storage and green molecules. We have to go aggressively on this transition, and our contribution will be significant to the government's 500 GW by 2030 target and Net Zero by 2070. This IPO is a completely fresh issue of 10,000 crore, all new shares, to meet our capital requirement for the transition. NTPC is the largest power generating company—people think of NTPC instantly when they think of power. We want the same for NTPC Green Energy for green power. We have already outlined programs to reach 60 GW by 2032, and with falling storage prices, we may achieve it even earlier.
H
Host57:46
So what is the plan for the 10,000 crore rupees? How do you plan to use the proceeds from the IPO?
J
Jaikumar Srinivasan57:50
The proceeds of this 10,000 crore will essentially be for funding our capital expenditure for nearly 19 GW in the next three and a half years. However, we may temporarily use some to retire costly loans, but broadly it is for capex.
H
Host58:12
Right now, could you give us a sense of debt to equity pre and post IPO? What is it now and what would it look like after?
J
Jaikumar Srinivasan58:16
The present debt-to-equity is 1.91. We will implement all this with a debt-equity ratio of 80:20, so the leverage is 1:4. At present we are quite comfortable, but our growth plans are aggressive. As of today, we have only 3.3 GW operational, but over 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 FY 27 we should have 19 GW or 19,000 MW. That was actually my next question.
As we go along, our requirement will increase because we have to aggressively work towards the transition. The government has announced 500 GW by 2030, and we have to play a very important role. For the net zero by 2070, our contribution will be significant. This is a completely fresh issue of 10,000 crore, all new shares, to meet our capital requirement for the transition. NTPC is the largest power generating company, and we want NTPC Green Energy to be the first name in green power. We have already chalked out programs to go up to 60 GW by 2032, and with storage prices coming down, we believe we can achieve that before 2032.
H
Host1:42:49
So what is the plan for the 10,000 crore rupees? How do you plan to use the proceeds from the IPO?
J
Jaikumar Srinivasan1:42:53
The proceeds of this 10,000 crore will be essentially for fueling our capital expenditure. It's 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.
H
Host1:43:15
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?
J
Jaikumar Srinivasan1:43:21
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 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, 5,000 MW next financial year, and another 8,000 MW in FY27. So by FY27 we should be having 19 GW.
H
Host1:44:13
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 for loan repayment, but going forward we will be requiring more and more capex. We are going to play a very important role in the energy transition. NTPC supplies almost a quarter of the electricity to the entire country, we have pan India presence, so similarly NTPC Green Energy will be leading the green energy company with footprint everywhere. To start, we are focusing on areas with maximum solar and wind potential like Gujarat, Rajasthan, Andhra Pradesh, Telangana. But going forward, we will go across the country. More importantly, there are two other important things: storage solutions and green molecules. Storage is needed for round-the-clock power and grid stability. Green molecules include green hydrogen, green methanol, green ethanol, and sustainable aviation fuel. Ten years back when solar started, there was apprehension, but now everyone has joined the momentum. Similarly, storage and green molecules will take off.
So you said that by FY27 the plan is for 19 GW. What does that mean?
J
Jaikumar Srinivasan1:47:03
By FY27 we will have 19 GW commissioned, but that does not mean only 19 GW. There is work going on continuously, and we intend to commission the 60 GW by 2032 before that. In terms of capex, let me give you ballpark figures. For solar, it takes approximately 5 crore per MW, and for wind, approximately 8 crore per MW. Our strategy is to have 90% solar and 10% wind. So for 60 GW, the capex will cross 3 lakh crore, about 3.25 lakh crore, just for solar and wind. Then there will be storage and green molecule components. So as we go along, our requirement will increase.
As mentioned, the IPO is a fresh issue of 10,000 crore for capital expenditure. We are on track to achieve 19 GW by FY27 and 60 GW by 2032. The capex requirement is substantial, and we are focusing on solar, wind, storage, and green molecules. NTPC Green Energy aims to be the leading green energy company in India.
Telangana, Gujarat, Rajasthan, and Andhra Pradesh are the states where we started, but going forward we will be going almost across the country wherever there is potential for solar or wind. More importantly, there are two other key aspects: storage solutions, because solar is only during daytime, and we need storage for round-the-clock or at least peak power and grid stability. We are working on that capex requirement. The fourth segment is green molecules: green hydrogen and derivatives like green methanol, green ethanol, and sustainable aviation fuel. Ten years back when the first megawatt of solar was commissioned in Gujarat, there was apprehension; today everyone has joined the momentum. Similarly, storage and green molecules will follow.
H
Host2:32:26
But in terms of capex, what does it translate into in absolute numbers? How much of capex?
J
Jaikumar Srinivasan2:32:30
Let me give you ballpark figures per megawatt. Our strategy is about 90% solar and 10% wind. For solar, it takes approximately 5 crore per megawatt (AC/DC difference, with 28-29% CUF). For wind, about 8 crore per megawatt. So for 60 GW, the total capex for solar plus wind alone will cross 3 lakh crores, specifically around 3.25 lakh crores. There will be additional storage and green molecule components. As we go aggressively, our requirement will increase. We have to play a vital role in the government's target of 500 GW by 2030 and net zero by 2070.
H
Host2:35:23
So what is the plan for the 10,000 crore rupees? How do you plan to use the proceeds from the IPO?
J
Jaikumar Srinivasan2:35:27
The proceeds of this 10,000 crore would be essentially for funding our capital expenditure, almost 19 GW in the next three and a half years. However, intermittently we may also use it to retire some costly loans temporarily, but broadly it is meant for capex.
H
Host2:35:49
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?
J
Jaikumar Srinivasan2:35:56
The present debt/equity is 1.91. However, we will implement all this with a debt-to-equity ratio of 80:20, so leveraging of 1:4. We are quite comfortable, but our growth plans are aggressive. As of today, we have 3.3 GW operational, more than 11 GW under construction. We are commissioning 3 GW this financial year (up to March), 5 GW next financial year, and another 8 GW in FY26-27. By FY27 we should have 19 GW.
H
Host2:36:53
That was actually my next question. I know that this is the kind of capex requirement going forward, and that is the reason the Director of Finance mentioned it will temporarily be used for loan repayment, but going forward we will require more and more capex. We are going to play a very important role in the energy transition. As you know, NTPC supplies almost one-fourth of the electricity to the entire country, with pan-India presence. Similarly, NTPC Green Energy will lead as a green energy company with a footprint everywhere.
J
Jaikumar Srinivasan3:19:10
Rather than so, all the new shares will be issued to meet our capital requirement. 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 instantly comes to mind. Similarly, going forward, whenever there will be green power, I think NTPC Green Energy will come to mind. That is our ambition. We have already chalked out programs to go up to 60 GW by 2032. We declared this about two and a half years back. Today, with storage prices coming down, we believe we will achieve that before 2032. So 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.
H
Host3:20:27
So what is the plan for the 10,000 crore rupees? How do you plan to use the proceeds from the IPO?
J
Jaikumar Srinivasan3:20:31
The proceeds of this 10,000 crore would be essentially for fueling 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.
H
Host3:20:53
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?
J
Jaikumar Srinivasan3:21:00
The present debt equity is 1.91. We will be implementing all this with a debt equity ratio of 80:20, so leveraging 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 MW) operational, whereas we have more than 11 GW (11,000 MW) under construction. So we are commissioning 3,000 MW in this financial year up to March, 5,000 MW in next financial year, and another 8,000 MW in FY 2026-27. So by FY27, we should be having 19 GW.
H
Host3:21:58
That was actually my next question. I know that and 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 a loan repayment, 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. Similarly, NTPC Green Energy will be playing a similar role. It will be the leading green energy company with footprint almost everywhere. To start with, we are focusing on areas with maximum potential for solar and wind: Gujarat, Rajasthan, Andhra Pradesh, Telangana. But going forward, we will go across the country wherever there is potential.
J
Jaikumar Srinivasan3:23:47
More importantly, there are two other important things: storage solutions. Solar is only during the daytime, so we need storage for round-the-clock or peak requirement. We are working on that. Also, the fourth segment is green molecules: green hydrogen and derivatives like green methanol, green ethanol, sustainable aviation fuel. Ten years back, when solar started, there was apprehension; now everyone accepts it. Similarly, storage and green molecules will gain momentum. Our plan for 19 GW by FY27 is just the beginning; we aim to commission 60 GW before 2032. In terms of capex, for solar it is approximately 5 crore per MW, for wind 8 crore per MW. With 90% solar and 10% wind, the capex for 60 GW will cross 3.25 lakh crore. Plus storage and green molecules will add more. We have to play a significant role in India's target of 500 GW by 2030 and net zero by 2070.
To meet the peak requirement and to have grid stability during the day when there is excess solar, there will be capex required for storage solutions. We are working on that. Going forward, there will be another important segment called green molecule, which is green hydrogen and green hydrogen-based 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, but today everybody is accepting it. Similarly, storage and green molecule solutions will gain momentum.
H
Host4:09:39
So you said that until FY27 the plan is for 19 GW. What does that mean?
J
Jaikumar Srinivasan4:09:44
By FY27 we will have 19 GW commissioned, but that does not mean only 19 GW. Work is going on continuously and we intend to commission the 60 GW by 2032 before that. In terms of capex, let me give ballpark figures: per megawatt of solar is about 5 crore, wind about 8 crore. So for 60 GW, it will cross 3.25 lakh crore. That is only solar and wind; storage and green molecule components will add more. We have to play an important role in the government's 500 GW by 2030 target and net zero by 2070. This IPO is a fresh issue of 10,000 crore to meet our capital requirement. As you know, NTPC is the largest power generating company. Similarly, NTPC Green Energy will lead in green power. We have already charted programs to go up to 60 GW by 2032, and with storage prices coming down, we believe we can achieve that before 2032. This public offer is to raise 10,000 crore at present, and as per guidelines, we will be required to dilute up to 25% in 3 years.
H
Host4:12:59
So what is the plan for the 10,000 crore rupees? How do you plan to use the proceeds from the IPO?
J
Jaikumar Srinivasan4:13:03
The proceeds of this 10,000 crore would be essentially for funding our capital expenditure. It's almost 19 GW in the next 3.5 years. However, intermittently we may use the proceeds to retire some costly loans temporarily, but broadly it is meant for capital expenditure.
H
Host4:13:27
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?
J
Jaikumar Srinivasan4:13:34
The present debt equity is 1.91. However, we will be implementing all this with a debt equity ratio of 80:20, so leveraging 1:4. At present we are quite comfortable, but our growth plans are aggressive. As of today we have only 3.3 GW operational, but more than 11 GW under construction. We are commissioning 3,000 MW this financial year, 5,000 MW next financial year, and another 8,000 MW in FY26-27. So by FY27 we should have 19 GW.
H
Host4:14:32
That was actually my next question. I know that and 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. We are going to play a very important role in the energy transition. As you know, NTPC supplies almost 1/4 of the electricity to the entire country. We have pan India presence. Similarly, NTPC Green Energy will be playing a similar role, leading green energy company with 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 go across the country. More importantly, there are two other important things: storage solution and green molecule.
J
Jaikumar Srinivasan4:15:43
The storage solution because as you know solar is only during daytime. So there is requirement of storage solution for round the clock or at least for peak requirement. To meet peak requirement and grid stability during the day when there is excess solar, there will be capex requirement for storage solutions. We are working on that. Going forward, there will be another important segment called green molecule: green hydrogen and derivatives like green methanol, green ethanol, sustainable aviation fuel. Let me add that about 10 years back when solar started, there was apprehension, but today everybody is accepting it. Similarly, storage and green molecule solutions will gain momentum.