The shares of Tata Power rallied 15% on Monday after the news broke that the company is planning to raise funds for the IPO of its renewable energy unit. As per various reports, the company is in talks with different pension and sovereign funds for this purpose. This includes the Government of Singapore Investment (GIC) and Canada Pension Plan Invest Board (CPPIB). The plan here is to gather about $500 million ahead of this proposed initial public offering.
Furthermore, several sovereign funds and bulge-bracket funds from the Middle East and the USA are also exploring investment opportunities in this IPO.
According to different sources, the company is in talks with Moelis & Co. to initiate an official process to find a buyer. Also, Tata Power is considering the plan to set up a renewable energy infrastructure investment trust or InvIT with its current operational assets.
As the aftereffects of this buzz, share prices of Tata Power rallied up to Rs. 255.5 on Monday.
A Brief Overview of Tata Power
Tata Power, formerly a part of the Tata Electric Companies, has been one of the leaders in technology adoption in this country’s energy sector. The company has a vast service portfolio that includes the following –
- Renewable energy generation
- Conventional energy generation
- Transmission and Distribution business
- Charging infrastructure for EVs
- Installation of rooftop solar panels
- EPC projects
Tata Power, along with its subsidiaries and partners, generates about 13,000 MW, and 32% of that comes from clean energy sources. Additionally, it serves around 12 million customers across India.
Apart from these, other highlights of Tata Power –
- Leader in India’s private solar rooftop installation segment
- Successfully executed India’s largest solar rooftop installation of 12 MW capacity in Amritsar
- Installed India’s first electric vehicle charging station for public usage in Mumbai
- Established a hydroelectric power generating unit of 40 MW, one of its kind in this country in Khopoli
- Apart from India, the company also has a presence in countries like Zambia, South Africa, Bhutan, Georgia, Indonesia, and Singapore
Financials of Tata Power
Besides the highlights of the company and its operational achievements, here is a glimpse of its finances –
|Financial Year||Total Assets||Net operating income||Total expenses||Profit after tax|
|March 2021||Rs. 986672.10||Rs. 326620||Rs. 259530||Rs. 5650|
|March 2020||Rs. 896739.10||Rs. 294800||Rs. 224390||Rs. 3640|
**Note: Rs. mentioned in millions
Tata Power historically has been a steady performer and provided stable returns. The recent news may have inflated the price, but it will settle down in the coming days. So, if you have plans to invest in Tata Power, it is ideal to go through its performance and returns and then make an informed decision.
Additionally, if you are planning to subscribe to this upcoming IPO, you can do so via the Angel One platform.
Frequently Asked Questions
- When was Tata Power incorporated?
Tata Power was incorporated in 1919.
- What is the current sector PE of Tata Power?
The current sector PE of Tata Power is 23.33.
- What is the face value of shares of Tata Power?
The face value of Tata Power’s shares is Re. 1 per share.