According to sources, Tata Power, the electric utility company controlled by India’s largest conglomerate Tata Group, is considering an initial public offering (IPO) for its renewable energy business that could raise about $473 million.
The power company has abandoned earlier plans to seek a partner to invest in its green assets via an investment trust, the sources said. Tata Power will seek approval for the IPO plan from its board, they said. One of the sources said that if they approve, the proposed listing in the Indian city of Mumbai could take place as soon as this year. Discussions are ongoing and details such as the size and timing could change, they clarified.
India’s booming renewable energy sector
Tata Power’s plan to list its green power business comes as India’s renewables sector is forecast to expand rapidly, driven by increasing power demand and decarbonization efforts. The country is working to meet Prime Minister Narendra Modi’s target to multiply its renewable power capacity almost five times over the next decade.
The company, including subsidiaries and joint entities, has a generating capacity of 12.8 gigawatts, about 30 percent of which comes from clean energy, according to its website. Its projects include solar power generation, installation, manufacturing and maintenance, as well as wind power generation.
India’s largest renewable energy producer, ReNew Power, agreed to merge with a US special purpose acquisition company earlier this year, giving it an $8 billion enterprise value.
Tata Power has operations in India, Singapore, Indonesia, South Africa and Bhutan. it is India’s largest integrated power company. The company has executed overseas projects in the Middle East, Africa and Southeast Asia including the Jebel Ali ‘G’ station in Dubai, Al-Khobar II and Jeddah III in Saudi Arabia, Shuwaikh in Kuwait, EHV substations in the UAE and Algeria, and power plant operation and maintenance contracts in Iran and Saudi Arabia.