NTPC Green eyes debt-equity ratio at 80:20 for capacity addition: Director Finance

The ₹10,000-crore capital raised from fresh equities will be “predominantly used” for capacity additions, says Jaikumar Srinivasan, Director Finance, NTPC & NTPC Green Energy. A part of the capital will be also used for retiring some of the debts as has been mentioned in the Draft Red Herring Prospectus (DRHP), he adds.

“We are raising around ₹10,000 crore of equity and this money will be predominantly used for our capacity additions. However, for the immediate term, we will be retiring some of the debts as has been mentioned in the RHP,” Srinivasan says in an interaction with Fortune India.

“As the capacity capital expenditure rises, we will be drawing more loans and that would be implementing all this capacity addition with a broadly a debt equity ratio of 80-20,” he says.

He adds that the company will require more debts going ahead, but on an immediate basis its debt would stand reduced with this mop up (IPO fundraising).

As per the document filed with the SEBI, the company intends to use 75% of the raised capital (₹7,500 crore) to clear debts availed by NTPC Renewable Energy Limited (NREL). As per the IPO document, NREL has entered into various borrowing arrangements, including borrowings in the form of term loans and various fund-based and non-fund based working capital facilities. As on July 31, 2024, the company had outstanding borrowings (fund based) of ₹16,235 crore on a consolidated basis.