Cabinet approves this power company's investment limit increase to Rs 20,000 crore for 60 GW renewable capacity by 2032

In a significant boost to India's renewable energy ambitions, the Cabinet Committee on Economic Affairs, led by Prime Minister Narendra Modi, has approved an enhanced delegation of power to NTPC Limited. This decision allows NTPC to invest up to an additional Rs 20,000 crore in its subsidiary, NTPC Green Energy Limited (NGEL), surpassing the previous limit of Rs 7,500 crore. This substantial financial backing is earmarked for accelerating Renewable Energy (RE) capacity addition, with the ultimate goal of achieving 60 GW of renewable energy capacity by 2032. This strategic move underscores the government's commitment to strengthening power infrastructure and ensuring reliable, round-the-clock electricity access across the nation, while also fostering direct and indirect employment opportunities during the construction and operation phases.

This enhanced delegation is poised to significantly expedite the development of renewable projects throughout India. Beyond the direct investment in RE capacity, the initiative is expected to stimulate local economies by boosting local suppliers, enterprises, and MSMEs, thereby encouraging entrepreneurship and contributing to the country's socio-economic development. As a leading power utility and Central Public Sector Enterprise, NTPC's ambitious target of 60 GW by 2032 is crucial for India to meet its broader objective of achieving 500 GW of non-fossil energy capacity by 2030 and its "Net Zero" emissions target by 2070. India has already made remarkable progress, with 50% of its installed electricity capacity now sourced from non-fossil fuels, five years ahead of its Paris Agreement commitment.

NGEL, as the flagship subsidiary of the NTPC Group, is spearheading this renewable energy expansion through both organic growth, primarily via its wholly-owned subsidiary NTPC Renewable Energy Limited (NREL), and through strategic partnerships with various State Governments and other Central Public Sector Undertakings. Currently, NGEL boasts an impressive portfolio of approximately 32 GW of RE capacity, which includes around 6 GW of operational capacity, 17 GW of contracted or awarded projects, and a robust pipeline of roughly 9 GW. This substantial backing from the Cabinet Committee on Economic Affairs will undoubtedly empower NGEL to further its mission and play a pivotal role in India's transition towards a greener, more sustainable energy future.

About the Company

NTPC Green Energy Limited (NGEL), a subsidiary of NTPC Limited and a key player in India's renewable energy sector, is actively driving the nation's sustainable energy transition. Incorporated in 2022, NGEL focuses on developing, constructing, and operating solar and wind energy projects across the country. NTPC group's total installed and commercial capacity to 76,530.68 MW. Furthermore, NGEL has forged a strategic partnership with Chhattisgarh State Power Generation Company Limited to develop up to 2,000 MW of renewable energy projects, including innovative floating solar solutions, reinforcing their commitment to a greener future.

According to Quarterly Results, the net sales increased by 23 per cent to Rs 622 crore and net profit increased by 253 per cent to Rs 233 crore in Q4FY25 compared to Q3FY25. In its annual results, the net sales increased by 13 per cent to Rs 2,210 crore and net profit increased by 37 per cent to Rs 474 crore in FY25 compared to FY24.

The company has a market cap of over Rs 90,000 crore and debtor days have improved from 306 to 85.3 days. The shares of the company have a PE of 200x, an ROE of 4 per cent and an ROCE of 5 per cent. The stock is down by 28 per cent from its 52-week high of Rs 155.30 per share while it is up by 32 per cent from its 52-week low of Rs 84.60 per share.

Disclaimer: The article is for informational purposes only and not investment advice.