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Private power generation company Tata Power Company (TPCL) is planning to raise up to Rs 2,000 crore through bonds to fund its operations.
At the same time, it has combined 450 million rupees (50 million US dollars) of sustainable business capital from banking institutions. Japan MUFG (Mitsubishi UFJ Financial Group) for renewable energy projects.
TPCL’s total debt increased marginally to Rs 49,535 crore in September this year, from Rs 47,590 crore in March. This accounts for increased borrowing in renewables businesses, Odisha Power Distribution Corporation, and coal-fired special purpose vehicles.
CRISIL Ratings has assigned ‘AA/stable’ rating to non-convertible debt securities (bonds), reaffirmed its ‘AA/stable’ rating for long-term bank facilities, and ‘A1+’ for short-term bank facilities.
Cash balance is estimated at Rs 4,000-5,000 crore in 2022-23 (FY23) and 2023-24 (FY24), respectively, of which the majority will meet the annual capital expenditure needs of approximately 5,000-6,000 billion rupees.
Debt maturities of Rs 5,500 crore in FY 2020 and Rs 6,500 crore in FY 2024 are expected to be largely repaid, given the strength of the company’s cash flow.
The rating continues to reflect TPCL’s stable earnings from controlled businesses, diversified business risk profile, and strong financial flexibility as part of the Tata Group. These strengths were partially offset by losses in Coastal Gujarat Power on account of non-viable project economics and moderate debt protection measures.
Regarding the financing of renewable projects, Mr. Sanjeev Churiwala, Head of Group Finance, TPCL said that after the joint Together with MUFG Bank, we are looking to further increase green finance to expand the clean energy group and contribute to achieving the net target of India.
Funding facilities from MUFG are extended for solar projects under TP Kirnali (TPKL). Established in 2020, TPKL is a wholly owned subsidiary of Tata Power Renewable Energy (TPREL).
TPCL is the holding company of TPREL.
Profit performance remains strong for the renewable energy business, driven by the commissioning of new renewable capacity.
Healthy operational performance above benchmarks continued across regulated manufacturing and distribution businesses, observed CRISIL.
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