NTPC likely to divest 25% of green energy arm via public offer

India’s largest power producer NTPC is likely to divest 25 per cent of its green energy arm through a public offering. These developments come after it shelved a plan to sell the stake to Malaysia’s Petronas.

NTPC had been seeking an even higher valuation, which was declined by Petronas. The Malaysian company had offered $460 million for a 20 per cent stake in NTPC Green Energy, outbidding other local Indian firms. 

The amount offered by Petronas was higher than what NTPC had been expecting when it called for expressions of interest in NTPC last year. It was 78 per cent above the second-highest bidder. The second-highest bidder was REC Ltd.  

The deal that has been called off now was the first time an Indian state-run company had offered a stake in a renewable energy arm as the sector attracts increasing foreign investment. 

NTPC wanted 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 per cent from the present 9.41 per cent.

According to a report in Bloomberg, Petronas later retracted the offer stating that the stake was too small and would not give it a seat on the board. 

Also read: Malaysia's Petronas offers Rs 3,800 crore for 20% stake in NTPC's green arm: Report