Tata Power to double its Capex this financial year to Rs 12,000 cr; well positioned to lead green energy transition: Chairman N. Chandrasekaran at 104th AGM.
Tata Power, one of India’s leading integrated power companies, today held its 104th Annual General Meeting (AGM) of shareholders virtually for the Financial Year 2022-23. Tata Power Chairman Mr. Natarajan Chandrasekaran, in his speech to shareholders, highlighted the Company’s financial performance, strategic plans, and commitment to clean energy solutions.
“Tata Power, being one of the largest integrated power players, is well positioned to take advantage of the growth opportunities in the sector. To meet the growth targets, Tata Power plans to invest about Rs 12,000 crore this financial year, which is double the Capex spent in FY23. Given the company’s successful track record in turning around Discoms, it will look to participate in privatisation opportunities as and when the policy reforms are undertaken,” said Mr. Chandrasekaran while addressing the shareholders.
Tata Power is well transitioning to become the round the clock green energy solutions provider. It is developing clean energy solutions like battery storage, pumped hydro projects for its commercial and industrial consumers.
The Company is exploring new technologies such as offshore wind, green hydrogen to ensure stable, reliable, and consistent supply from renewable power source. Tata Power, over the years, has continued its pursuit of excellence, growth and technological advancement. The Company continues to deliver on all its stated commitments across financial, operational, and ESG metrics.
This year, the Company has allocated an additional capex of Rs 12,000 crore and the amount of capex allocation will increase in future years with new project opportunities in Renewables and T&D businesses. Over last 3 years, the Company has deployed a capex of almost Rs 18,000 crore
Tata Power continues to focus on renewable capacity addition and transforming into a consumer-oriented business. Its renewable portfolio currently stands at 7 GW with 3.9 GW operational and 2.7 GW under implementation. Tata Power has an open order book of >4GW of large utility scale projects, amounting to more than Rs 17,000 crore.
The Company already has a clean and green capacity (non-carbon) of 37%, which is expected to increase to 70% by 2030.
Tata Power is actively transforming into a consumer-centric company by expanding its power distribution network across the country and establishing new-age energy solutions such as Solar Rooftop, EV Chargers, and Energy Management Solutions.
To meet the supply chain challenges of Solar Module and Cell, Tata Power is setting up 4 GW greenfield solar cell and module manufacturing capacity in Tamil Nadu with an investment of around Rs 3,000 crore. The project is on track and will get operational in this financial year.
Tata Power is a leading solar rooftop provider in India with installed capacity of almost 1,650 MW. The company’s network is spread over 275 districts and 450+ dealers across India. The Company is driving new green power solutions such as Green Open Access, hybrid solutions and round the clock power solutions for commercial and industrial consumers.
Tata Power is also focusing on growing its business footprint through emerging technologies like Pumped Hydro Storage, Offshore Wind and Green Hydrogen. It is also exploring new technologies like small modular nuclear reactors. The Company will develop Pumped Hydro Storage at its existing hydro plants in Lonavala/ Pune, where the existing water reservoirs will be used.
Tata Power plans to expand its EV Charging points to 25,000+ over the next 5 years. As the largest EV charging point operator with nearly 60% market share in the country, the Company has installed 40,000+ home chargers, 4000+ public and semi-public charging points, and 250 bus charging points. It is present in 550 cities and expanding.
Leveraging the group synergy, Tata Power is providing solar rooftop and group captive solutions not only to Tata Group companies like Tata Motors, Tata Steel, IHCL & Tata Chemicals, but also to other large corporates and industries to support them in transitioning their energy requirements. The Company is set to improve its market share to 30% through evolved offerings.
Tata Power is working on opportunities for transmission projects through Tariff Based Competitive Bidding for over 10,000 ckm over the next 5 years.
Tata Power has emerged as the largest private power distribution company in the country serving nearly 13 million consumers across Delhi, Mumbai, Ajmer and the State of Odisha. The number of consumers served by Tata Power is greater than the combined number of consumers served by all private distribution utilities in the country. The four Odisha discoms have improved reliability of power through network strengthening, infrastructure development and technology deployment, including SCADA & GIS systems, ERP and CRM. They have also reduced AT&C losses by nearly 10%
This experience of supplying power in both urban and rural areas will help the Company to take up similar opportunities in other States, once they open up for similar public-private partnerships. Tata Power plans to reach >40 million consumers over the next five years.
Mundra plant operated under Section 11 of the Electricity Act, 2003 issued by the Ministry of Power, where the tariff is cost neutral. This has helped the plant sustain its operations while supplying power to its procurers.
Tata Power has focused on strengthening its balance sheet, improving its net debt to underlying EBITDA from 3.92 to 2.66, and reducing its debt to equity from 1.53 to 1.03. These efforts have enhanced value creation for stakeholders.
The Company’s return on equity increased from 9.5% in FY22 to 12.6% in FY23, while the return on capital employed rose from 7.8% to 9.3% during the same period.
Based on the robust performance for FY23, the Company is recommending a dividend of 200%, which is Rs 2/- per equity share of Re 1/- as against Rs 1.75 per equity share in FY22.
Tata Power’s consolidated revenue witnessed a growth of 32% at Rs 56,033 crore in FY23 compared to Rs 42,576 crore in FY22. This growth can be attributed to higher availability in the Mundra Thermal Plant, increased sales across distribution companies, and robust additions to the Renewables portfolio.
The Company’s consolidated EBITDA grew by 23% at Rs 10,068 crore in FY23, showcasing consistent performance in existing Generation, Transmission, Distribution businesses, and new capacity additions in Renewables. Consolidated reported PAT also witnessed a significant increase of 77% at Rs 3,810 crore in FY23 due to improved performance across all business clusters.
Tata Power is fully aligned with Tata Group’s Project Aalingana, which outlines the Group’s approach to reduce emissions and become carbon net zero by 2045. The Company is committed to becoming carbon neutral by 2045, 100% Water Neutral by 2030, no Net Impact on Biodiversity before 2030 and becoming an organisation with Zero Waste to landfill before 2030. The Company has also taken multiple initiatives to conserve biodiversity in and around its operational areas.