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

Malaysia's Petronas has offered Rs 3,800 crore ($460 million) to buy a 20% stake in the green energy arm of India's largest power producer, NTPC Ltd, in the first deal of its kind by a PSU, said a report on Thursday.

The offer price was higher than the Rs 3,000 crore 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, said Reuters quoting three sources. It values the NGEL at $2.3 billion.

The deal was the first time a PSU has offered a stake in a renewable energy arm and comes as the 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, commerce ministry data showed.

Petronas outbid other firms for the stake with an offer of Rs 27.52 per share, one government official, an industry source and a banker told Reuters. The second-highest bidder, REC Ltd, offered Rs 15.47 per share, while Indraprastha Gas Ltd (IGL) placed a bid of Rs 6.67 per share, the sources told Reuters.

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.

India 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.