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May 3, 2021updated 12 Nov 2021 9:02am

India’s Tata Power considers IPO for renewable energy arm

India’s Tata Power has reportedly announced plans for an initial public offering (IPO) for its renewable energy business arm, which could raise a capital of approximately $473m (Rs35bn).

By Umesh Ellichipuram

India’s Tata Power has reportedly announced plans for an initial public offering (IPO) for its renewable energy business arm, which could raise a capital of approximately $473m (Rs35bn).

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Citing people familiar with the matter, Bloomberg reported that Tata Power will seek board approval for the IPO plan.

If approved, the proposed listing could take place this year in Mumbai, one of the people said.

Discussions are currently underway and the details such as the size and timing are expected to change.

Tata Power representative did not comment immediately.

The company’s latest plan to list its business unit comes as India’s renewables sector is forecast to expand rapidly. Increasing power demand and decarbonisation efforts are contributing to this expansion.

According to Tata Power’s website, the company, including subsidiaries and joint entities, has generating capacity of 12.8GW. Nearly 30% of this comes from clean energy.

India aims to multiply its renewable energy generation capacity by five times over the next ten years to meet Prime Minister Naren­dra Modi’s target.

Last month, Tata Power reportedly called off talks with Malaysian oil and gas company Petronas over an almost $2bn investment in its renewable energy business.

Insiders told the Economic Times that the company decided to put an end to the discussions after both parties entered the final stages of negotiating a binding term sheet.

Last year, Tata Power Renewable Energy, a subsidiary of Tata Power, began talks to raise an investment of between $500m and $750m for its renewable energy platform through a proposed infrastructure investment trust (InvIT) to decrease its net debt from around $4.7bn (Rs360bn) to $3.3bn (Rs250bn).

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Free Report
img

Wind Power Market seeing increased risk and disruption

The wind power market has grown at a CAGR of 14% between 2010 and 2021 to reach 830 GW by end of 2021. This has largely been possible due to favourable government policies that have provided incentives to the sector. This has led to an increase in the share of wind in the capacity mix, going from a miniscule 4% in 2010 to 10% in 2021. This is further set to rise to 15% by 2030. However, the recent commodity price increase has hit the sector hard, increasing risks for wind turbine manufacturers and project developers, and the Russia-Ukraine crisis has caused further price increase and supply chain disruption. In light of this, GlobalData has identified which countries are expected to add the majority of wind power capacity out to 2030. Get ahead and download this whitepaper for more details on the current state of the Wind Power Market.
by GlobalData
Enter your details here to receive your free Report.

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