TATA-Group Solar & Wind Power Company and Bhutan's Druk Green Power Corporation Ltd, Forge Partnership to Develop 5,000 MW of Clean Energy Projects
The stock is up by 60 per cent from its 52-week low of Rs 256.95 per share and gave multibagger returns of over 600 per cent in 5 years.
In a landmark move to strengthen Regional energy security and support the clean energy transition, The Tata Power Company Limited (Tata Power), one of India’s largest integrated power companies, has entered into a strategic partnership with Druk Green Power Corporation Limited (DGPC), a subsidiary of Druk Holding and Investments Limited, sole generation utility of Bhutan, to collaborate and develop at least 5,000 MW of clean energy generation capacity in Bhutan.
This is in keeping with Bhutan’s vision for its energy sector which is to take its overall generation capacity to 25,000 MW by 2040 for its energy security and regional energy integration. Bhutan plans to achieve this target through diversification in its energy portfolio beyond traditional hydropower, which would include solar and geothermal energy. This will extend to diversifying project structuring and financing through such strategic partnerships.
With the support of the Royal Government of Bhutan and the Government of India, this marks the largest partnership between two of the leading power companies of the two nations in Asia's clean energy sector. Both companies have a stellar track record in the energy sector and a long-standing relationship having worked together for over 15 years.
This strategic partnership signifies Tata Power's pre-eminence as the most preferred clean energy partner not only in India but also as a regional leader. This partnership will help unleash Bhutan’s great potential for hydropower and its important role in ensuring energy security in the region.
Through the collaboration, at least 5,000 MW of renewable energy projects; including 4,500 MW of hydropower comprising the 1,125 MW Dorjilung HEP; 740 MW Gongri Reservoir; 1,800 MW Jeri Pumped Storage; and 364 MW Chamkharchhu IV will be developed in phases together. Another 500 MW of Solar projects will be developed by Tata Power Renewable Energy Limited (TPREL), a subsidiary of Tata Power. As a precursor to this collaboration, Tata Power recently acquired a 40 per cent stake for Nu/INR 8.30 billion in the 600 MW Khorlochhu Hydroelectric Project where an investment of over Nu/INR 69 billion will be made to develop the project.
Tata Power has had a long-standing relationship with DGPC since 2008 when the two companies joined forces to successfully develop the 126 MW Dagachhu Hydropower Plant as the first Public Private Partnership in Bhutan’s hydropower sector. Tata Power also has a transmission project of a 1,200 km long Tala transmission line that evacuates clean power from Bhutan to India.
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About Tata Power Company Ltd
Tata Power, a leading integrated power company under India's largest conglomerate Tata Group, boasts a diverse portfolio of 14,707 MW spanning the entire power spectrum. This includes the generation of both renewable and conventional energy, along with transmission, distribution, trading, storage solutions and even solar cell and module manufacturing. As champions for clean energy, they've committed to achieving carbon neutrality before 2045. Beyond generation, Tata Power has established India's most comprehensive clean energy platform, offering rooftop solar solutions, microgrids, storage solutions, EV charging stations and home automation systems.
Tata Power Company Ltd reported its 20th consecutive quarterly PAT growth. During the quarter that ended September 30, 2024, the Company reported its highest-ever PAT before exceptional items of Rs 1,533 crore, up 51 per cent YoY. Consolidated EBITDA during the quarter rose 23 per cent to Rs 3,808 Crore on the back of ramped-up solar manufacturing, favorable regulatory development in distribution and operational efficiency across businesses. For the H1FY25 period, the company clocked its highest-ever Revenue, EBITDA, and PAT before exceptional items at Rs 32,057 crore, Rs 7,158 crore, and Rs 2,721 Crore, respectively. Looking at its annual results, the net sales increased by 10 per cent to Rs 61,542 crore and net profit increased by 12 per cent to Rs 4,280 crore in FY24 compared to FY23.
With a robust order book of Rs 15,900 crore as of September 30, 2024, Tata Power is poised for an electrifying future. The company has a market cap of Rs 1.28 lakh crore. The stock is up by 60 per cent from its 52-week low of Rs 256.95 per share and gave multibagger returns of over 600 per cent in 5 years. Investors should keep an eye on this mid-cap power stock.
Disclaimer: The article is for informational purposes only and not investment advice.