Tata Power’s big bet on green energy just got bigger | Daily News Byte

As India prepares to take a leap forward in its renewable energy development, companies are arming themselves at every step.

Here are the details.

Tata Power’s ₹Promotion of renewable energy 750 billion kip

Tata Motors aims to increase its total generating capacity of 13.5 gigawatts (GW) by 2022 to 30 GW in 2027. ₹750 billion in the next 5 years.

Such growth will push the share of renewable energy from 34% to 60% in 2027 and 80% in 2030.

But Tata Power is not alone.

Private players like Adani and Reliance along with government-owned NTPC are also ramping up their renewable capacity.

While Adani Green Energy is developing a renewable energy portfolio of 25 GW by 2025, Reliance aims to set a renewable energy capacity of 100GW by 2030.

Tata Power also aims to become the ESG (Environmental, Social, and Governance) standard in the energy sector. The company has set out 3 important goals including becoming carbon neutral in 2045, 100% water neutral in 2030 and There is waste in mining before 2030.

In addition, the company is also focusing on the expansion of the energy consumption solution business segment. A new center and era.

This includes solar roofs, EV chargers, solar pumps, smart metering and energy management solutions.

Tata Power is the leader in electric vehicle charging stations with more than 1,300 charging stations under its umbrella.

Aiming to build a large-scale electric vehicle battery charging infrastructure, the company plans to Become a leader with more than 1 million chargers in 2026.

The company is also setting up a 4GW solar cell and module manufacturing capacity in Tamil Nadu with an investment of​ ₹30 billion.

It enjoys a healthy solar EPC (engineering, procurement, and construction) order ₹130 billion. With the solar sector expected to grow 10 times in the next five years, this segment could become a major source of revenue for the company.

How will the company finance these expansions?

Currently, Tata Power enjoys a comfortable debt position to support its growth, with a net debt per share of 1.5x.

However, the current interest coverage ratio is low at 1.6x.

But considering the company is part of the cash-rich Tata group, financing this new era of growth shouldn’t be a concern. Companies can raise more debt or sell more shares to global investors.

Earlier this year, Tata Power sold a 10.5% stake in its new energy business to Blackrock and Mubadala for a combined value of ₹40 billion dollars shows the world’s interest in replacing India.

To conclude

Tata power’s ambitious plans indicate the company’s eagerness to lead the exploding renewable energy segment.

The company’s renewable business spans five verticals with strong visibility for growth. Moreover, all enterprises will be under one umbrella, helping to increase the capital increase and utilization. .

While sustainable growth is not an issue, concerns about how the company will grow its business remain.

It faces stiff competition from Reliance Industries and Adani and government-funded utilities like NTPC.

How these capex plans will unfold remains to be seen. Meanwhile, stay tuned for more updates from this space.

Disclaimer: This article is for informational purposes only. It is not a stock recommendation and should not be treated as such.

This article was compiled from Equitymaster.com