Tata Power Company Ltd Share Price – NSE  /  BSE

Power Generation & Distribution, Mid Cap

TPREL is a wholly owned subsidiary of Tata Power Company. TPREL is Tata Power's primary investment vehicle for the clean and renewable energy based power generation capacity.

The collaboration aims to facilitate financing solutions under the Pradhan Mantri Surya Ghar Muft Bijli Yojana scheme for installations up to 3 KW, as well as extend support for installations ranging from 3 to 10 KW under the regular scheme.

Under the framework of the PM Surya Ghar Muft Bijli Yojana initiative, residential consumers can avail loans up to Rs 2 lakh at an annual interest rate of 7%, in compliance with government regulations. They can avail a nominal margin money requirement of 10% and collateral-free financing. Furthermore, the tenure for repayment extends up to 10 years.

For installations exceeding 3 KW up to 10 KW, TPSSL and Indian Bank present a tailored financing solution that accommodates the diverse needs of homeowners. Eligible applicants can access loans up to Rs 6 lakh, with a margin money requirement of 20%. Interest rates ranging from 8.4% to 10.8% per annum ensure competitive financing options.

Deepesh Nanda, CEO & managing director of TPREL, stated, “At TPREL, we are resolutely committed to propelling a sustainable future through the promotion of renewable energy solutions. This collaboration marks a significant step forward, offering tailored financing solutions to empower homeowners while seamlessly aligning with government initiatives like the PM Surya Ghar: Muft Bijli Yojana, aimed at promoting rooftop solar adoption.”

Vikas Kumar, chief general manager, retail assets & MSME, Indian Bank commented, “This partnership demonstrates our commitment to promoting awareness, growth, and social upliftment. By offering financial assistance and expertise, we aim to make a significant contribution to India's energy objectives and ensure the success of this laudable initiative.”

Tata Power is India's largest integrated private power utility, with installed generation capacity of 12.4 GW as on 10 November 2023 (excluding 1.98 GW through a platform structure). The company is present across the power business spectrum, from generation (thermal, hydro, solar and wind) to transmission and distribution.

Indian Bank is a public sector bank. The Government of India held 73.84% stake in the bank as on 31 March 2024.

Shares of Tata Power Company rose 0.40% to Rs 429.60 while Indian Bank shed 0.39% to currently trade at Rs 518.60 on the BSE.

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Tata Power Company announced that CRISIL has upgraded the long term rating on bank loan and debt facilities of the company from CRISIL AA; Positive to CRISIL AA+; Stable and has reaffirmed its CRISIL A1+ rating on the company's commercial paper programme and short term facilities.

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The agency has reaffirmed its 'CRISIL A1+’ rating on the company’s commercial paper programme and short-term bank loans.

CRISIL stated that the rating upgrade reflects the improving business risk profile of the company with sustained improvement in operating profitability across the power generation and distribution business during fiscal 2024.

The company has sustained its healthy financial risk profile, with consolidated net leverage (ratio of net debt to adjusted earnings before interest, tax, depreciation and amortisation [EBITDA]) estimated below 4 times as on 31 March 2024, and expected to remain so over the medium term.

The increase in operating profitability of Tata Power since fiscal 2023 is mainly on account of better profitability of its Mundra Ultra Mega Power Project (Mundra plant), improved efficiency of the Odisha distribution companies (discoms) and continued growth in the renewable energy (RE) business with steady capacity addition.

The company continues to benefit from its integrated operations, robust power demand in the country supporting higher plant load factor (PLF) of its power plants, healthy execution in the RE segment, which has also been supported by moderating module prices.

The improving operating profitability in distribution business, with reducing aggregate technical and commercial (AT&C) losses in Odisha and ongoing recovery of regulated assets in other discoms, have also helped.

As the company scales up operations, improving operating efficiency and steady cash creation in thermal generation and regulated business will support strong operating cash accrual, despite the reduction in earnings from coal mining business amid lower coal prices since last fiscal.

Furthermore, increasing integration in the RE business through in-house module manufacturing and engineering, procurement, and construction (EPC) business will lend support going forward.

The ratings also factor in the strong financial flexibility of Tata Power aided by being a part of the Tata group. The financial flexibility is also supported by the demonstrated ability of Tata Power to raise strategic growth funds (nearly Rs 4,000 crore raised during fiscal 2023 by selling approximately 10% stake in the RE business). This will help achieve the capex target while keeping leverage within the rating threshold.

Tata Power is India's largest integrated private power utility, with installed generation capacity of 12.4 GW as on 10 November 2023 (excluding 1.98 GW through a platform structure). The company is present across the power business spectrum, from generation (thermal, hydro, solar and wind) to transmission and distribution.

The scrip had declined 0.44% to end at Rs 428 on the BSE on Friday.

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Tata Power Company will hold a meeting of the Board of Directors of the Company on 8 May 2024.

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