Malaysia's Petronas offers $460 mln for stake in India's NTPC's green arm - sources

Indraprastha Gas

16/03/2023 11:34

By Sarita Chaganti Singh
       NEW DELHI, March 16 (Reuters) - Malaysia's Petronas
 PETR.UL  has offered 38 billion rupees ($460 million) to buy a
20% stake in the green energy arm of India's largest power
producer, NTPC, in the first deal of its kind by a state-run
firm, three sources told Reuters. 
    The offer price was higher than the 30 billion rupees NTPC
 NTPC.NS  had been expecting when it asked for expressions of
interest in NTPC Green Energy (NGEL) last year and was 78% above
the second-highest bidder. It values the NGEL at $2.3 billion.
    NTPC and Petronas did not immediately respond to requests
for comment. The sources declined to be named as the deal is
still being finalised.
    The deal was the first time an Indian state-run company has
offered a stake in a renewable energy arm and comes as the
country's renewables sector is attracting increasing foreign
investment. 
    Renewables are among the country's top five industries for
overseas funds this fiscal year, taking a 5% share of all
inflows from April to September 2022 against 3.3% in the same
period a year earlier, data from India's commerce ministry
showed.
   Petronas outbid other local firms for the stake with an offer
of 27.52 rupees per share, one government official, an industry
source and a banker said. The second-highest bidder, REC Ltd
 RECM.NS , offered 15.47 rupees per share, while Indraprastha
Gas Ltd (IGL)  IGAS.NS  placed a bid of 6.67 rupees per share,
the banker said. 
    REC and IGL were also not immediately available for comment.
    NTPC plans to use the proceeds from the sale to expand its
non-fossil businesses. The company has earmarked investments of
more than $30 billion in the next 10 years to raise the share of
non-fossil energy in its portfolio to 45% from the present
9.41%.
   The company has committed to adding 60 gigawatts of renewable
energy by 2032 on a total group capacity of 130 gigawatts by
that date.
   NGEL will drive the parent company's non-fossil businesses. 
   India has set a goal to become net-zero by 2070 and has
committed to have 50% of its installed electric power capacity
from non-fossil fuel-based energy by 2030.
    The country targets 500 gigawatts of renewable energy
generation by 2030. Renewable energy sources including wind,
hydro and biomass, constitute 30% of the country's present
installed capacity of 412 gigawatts.
    Earlier this month, the CEO of Petronas' clean energy arm
told Reuters that India and Australia are its key markets for
growth and it expects to tap more financing to meet its
ambitious targets.
    The Petronas transaction needs to be approved by the federal
government.
    
($1 = 82.6800 Indian rupees)

 (Reporting by Sarita Chaganti Singh; Editing by Sharon
Singleton)
 ((Sarita.ChagantiSingh@thomsonreuters.com;))