India’s largest energy conglomerate NTPC Ltd. updated in a statement on Thursday that Malaysia’s Petronas has proposed to buy a 20% holding in the renewable energy business of the company for Rs 3,800 crore. If concluded, this will be the first of its kind purchase transaction by an Indian public sector undertaking (PSU). 

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NTPC Green Energy Ltd. (NGEL) is the green energy arm of NTPC. Last year, the CPSU invited expressions of interest from various parties for a stake sale. The Petronas offer is of key significance because it is 78% higher than the second-highest bid received by NTPC. 

The transaction is the first of its kind by a government company. Previously, only independent players such as Adani Group companies would sell stakes in their power companies to international energy companies. 

A government official communicated that Petronas offered Rs 27.52 per share for the stake. The second highest bid came from REC Ltd at Rs 15.47 per share. IGL ranked as the third-highest bidder with an offer of Rs 6.67 per share. 

The management plans to deploy the proceeds from the stake sale to its non-fossil businesses. It is eying investments upwards of $30 billion over the next decade to increase the contribution of non-fossil power in its energy mix. 

The company has set a target to reach 45% non-fossil energy share during the period from 9.41% at the present. In gigawatts terms, renewable power generation is expected to be 60 GW of the total group capacity of 130 GW by then. 

All these developments are part of the larger vision of India attaining a net-zero carbon status by 2070. 

The nation’s green power generation capacity presently stands at 412 GW. This includes wind, hydro, biomass, and more. It is projected to reach 500 GW by 2030. 

Founded almost 5 decades ago in 1975, NTPC Ltd. (formerly National Thermal Power Corporation) is an Indian central public sector undertaking (CPSU) under the Ministry of Power, Government of India. The government holds a 51.1% stake in the company. 

The shares of the company closed at Rs 176.95 a piece on Friday, down 1.48% for the day giving the energy giant a market capitalization of Rs 171,500 crore. 

Written by Vikalp Mishra


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