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Tata Power plans to double CapEx, focuses on renewables
POWER & RENEWABLE ENERGY

Tata Power plans to double CapEx, focuses on renewables

Tata Power has announced its plans to double its capital expenditure to Rs 120 billion in the current fiscal year, prioritising investments in renewables, distribution, transmission, and solar equipment manufacturing capacity. Natarajan Chandrasekaran, Chairman of Tata Power, addressed the company's 104th annual general meeting and stated, "To meet the growth targets, Tata Power plans to invest about Rs 120 billion, which is twice the capital expenditure spent in FY23."

The proposed capital expenditure encompasses investments in the upcoming 4 GW manufacturing plant, ongoing renewable projects, transmission and distribution businesses in Odisha, Delhi, and Mumbai, as well as new opportunities. Chandrasekaran informed shareholders that these projects will mainly be funded through internal accruals and existing cash reserves.

Chandrasekaran assured shareholders that the 4 GW cell and module manufacturing plant in Tamil Nadu is progressing well, with the module line expected to be ready by October 2023 and the cell line by the end of the year.

Tata Power also intends to focus on expanding its presence in the power distribution business in India and participate in bidding for distribution companies (discoms) utilities in the country. Chandrasekaran expressed confidence in the company's ability to turn around discoms, stating that they will seize privatisation opportunities as policy reforms are implemented.

Tata Power aims to become an Environmental, Social, and Governance (ESG) benchmark in the power sector by achieving three key goals: carbon neutrality by 2045, water neutrality by 2030, and zero net impact on biodiversity before 2030. Additionally, the company aims to achieve zero waste to landfill by 2030.

Based on the company's performance, the directors have recommended a dividend of 200 per cent or Rs two per equity share of Rs one.

Chandrasekaran highlighted that consolidated revenue grew by 32 per cent to Rs 560.33 billion in FY22 compared to Rs 425.76 billion in FY21. The consolidated reported net profit (PAT) also increased by 77 per cent to Rs 38.1 billion in FY22 from Rs 21.56 billion in FY21, driven by improved performance across all business clusters.

Chandrasekaran emphasised the significant investment in the renewables sector, with $500 billion out of the global low-carbon energy investments of $1.11 trillion in 2022.

He noted that India's power demand reached record levels of 216 GW in the early months of FY23, driven by accelerated economic growth, increased industrial and commercial activities, and changing weather patterns. Power demand in India has been growing at around 9 per cent in FY23 and has exceeded the country's GDP growth rate by 1.11 times over the past five years. However, per capita power consumption in India remains the lowest in the world.

Chandrasekaran reiterated the company's focus on renewables, aiming to achieve 500 GW of non-fossil installed capacity by 2030. He emphasised that India is unique among major economies in using renewable energy to meet power demand growth without replacing or substituting thermal power.

Tata Power has announced its plans to double its capital expenditure to Rs 120 billion in the current fiscal year, prioritising investments in renewables, distribution, transmission, and solar equipment manufacturing capacity. Natarajan Chandrasekaran, Chairman of Tata Power, addressed the company's 104th annual general meeting and stated, To meet the growth targets, Tata Power plans to invest about Rs 120 billion, which is twice the capital expenditure spent in FY23.The proposed capital expenditure encompasses investments in the upcoming 4 GW manufacturing plant, ongoing renewable projects, transmission and distribution businesses in Odisha, Delhi, and Mumbai, as well as new opportunities. Chandrasekaran informed shareholders that these projects will mainly be funded through internal accruals and existing cash reserves.Chandrasekaran assured shareholders that the 4 GW cell and module manufacturing plant in Tamil Nadu is progressing well, with the module line expected to be ready by October 2023 and the cell line by the end of the year.Tata Power also intends to focus on expanding its presence in the power distribution business in India and participate in bidding for distribution companies (discoms) utilities in the country. Chandrasekaran expressed confidence in the company's ability to turn around discoms, stating that they will seize privatisation opportunities as policy reforms are implemented.Tata Power aims to become an Environmental, Social, and Governance (ESG) benchmark in the power sector by achieving three key goals: carbon neutrality by 2045, water neutrality by 2030, and zero net impact on biodiversity before 2030. Additionally, the company aims to achieve zero waste to landfill by 2030.Based on the company's performance, the directors have recommended a dividend of 200 per cent or Rs two per equity share of Rs one.Chandrasekaran highlighted that consolidated revenue grew by 32 per cent to Rs 560.33 billion in FY22 compared to Rs 425.76 billion in FY21. The consolidated reported net profit (PAT) also increased by 77 per cent to Rs 38.1 billion in FY22 from Rs 21.56 billion in FY21, driven by improved performance across all business clusters.Chandrasekaran emphasised the significant investment in the renewables sector, with $500 billion out of the global low-carbon energy investments of $1.11 trillion in 2022.He noted that India's power demand reached record levels of 216 GW in the early months of FY23, driven by accelerated economic growth, increased industrial and commercial activities, and changing weather patterns. Power demand in India has been growing at around 9 per cent in FY23 and has exceeded the country's GDP growth rate by 1.11 times over the past five years. However, per capita power consumption in India remains the lowest in the world.Chandrasekaran reiterated the company's focus on renewables, aiming to achieve 500 GW of non-fossil installed capacity by 2030. He emphasised that India is unique among major economies in using renewable energy to meet power demand growth without replacing or substituting thermal power.

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