Tata Power said it is on track to monetise 2.7 GW in Renewable Energy (RE) assets through a private InvIT.

The transfer of assets to the InvIT will allow us to churn capital and reduce net debt substantially, said Praveer Sinha, CEO & Managing Director, Tata Power. However, the company did not specify timelines of the InvIT.

Further, Tata Power said that it is working on a long-term strategic plan focused on reducing debt to strengthen the balance sheet. “This plan involves divestment of non-core and certain overseas investments, along with restructuring of some of our businesses to unlock value and simplify the structure of the company,” said Sinha.

Recently, Tata Sons infused ₹2,600 crore through preferential allotment which has been used for reducing debt. Tata Power also closed the sale of its defence business to Tata Advanced Systems Ltd at an enterprise value of ₹1,076 crore. Subsequently, net debt reduced by 15 per cent to ₹36,840 crore in comparison to March 2020 when debt was ₹43,578 crore. For the September-ended quarter, Tata Power reported a net profit of ₹371 crore, a 10 per cent rise compared to ₹339 crore posted in the same period last year, signalling a stable performance across all its businesses. On a sequential basis, profits were up 38.4 per cent compared to ₹268 crore posted in the June-ended quarter. Revenues on a sequential basis went up 22.2 per cent compared to ₹6,540 crore in Q1.

It reported revenues of ₹8,413 crore, a 15 per cent growth when compared to ₹7,329 crore posted in the year-ago period. This was mainly due to the TP Central Odisha Distribution Limited (TPCODL) acquisition and higher Solar EPC revenue, Tata Power said. “We are glad to report that during the quarter, all our divisions and subsidiaries have reported robust performance despite pandemic related challenges,” said Sinha.

Further, in the quarter, Tata Power Solar booked 347 MW of new solar/hybrid bids. With this, the solar EPC order book stands at ₹8,687 crore. We will continue to stay focused on our key growth areas of Renewable and Distribution businesses and to demonstrate benchmark performance of all our existing generation, transmission and distribution businesses, said Sinha. In addition to 2.7 GW of RE assets, Tata Power has another 1.2 GW of hydro and waste heat based assets.

EBITDA for the September-ended quarter was up by 7 per cent at ₹2,276 crore when compared to ₹2,124 crore posted in the same period last year. This, the company attributed to strong operating performance of all businesses. In Q2, Tata Power was awarded a contract for development of 347 MW of new solar and hybrid bids. It also received approvals from SEBI & RBI for merger of CGPL (which runs Mundra power plant), Aftaab and Tata Power Solar Systems Ltd (TPSSL) with the company subject to NCLT approval. In July, CGPL raised ₹350 crore by issuing non-convertible debentures (NCDs) on private placement basis.

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