Rupesh D Sankhe on NTPC Renewables IPO growth prospects
«Only the large companies like NTPC, Tata Power with a strong balance sheet or NHPC, JSW Energy, they can only support this kind of incremental capex which are required beyond 2032, close to 4 lakh, 5 lakh crore kind of opportunity,» says Rupesh D Sankhe, Elara Capital.
To begin with, there is debate out on the street whether this IPO of NTPC Renewables is the best thing to do or is it the right time to do or not? What is your take on the same?
Rupesh D Sankhe: If you look at their capacity addition target by 2032, it is close to 60 gigawatt capacity. So, current operational capacity is just 3.2 gigawatt and they cannot support more than 2 gigawatt per annum. So, definitely the incremental cash flows will come at around 2,500. It will not add significant growth in their capacity addition for next two to three years.
But once they reach a sizable capacity, let us say 15 gigawatt, 20 gigawatt by 2027, 2028 maybe incremental capacity on a per annum basis could be significantly higher, so they can achieve 60 gigawatt of capacity addition by 2032. So, they are looking from longer term perspective. If we look at the peak demand, which we are forecasting around 380 gigawatt by 2030 and assuming 6% kind of energy demand, potentially we need around 80 gigawatt of renewable capacity by 2032 per annum basis.
So, only the large companies like NTPC, Tata Power with a strong balance sheet or NHPC, JSW Energy, they can only support this kind of incremental capex which are required beyond 2032, close to 4 lakh, 5 lakh crore kind
