Tata Power Company Share price and Fundamental Analysis

Company History

Tata Power Company Limited is India's largest integrated private power company, with a significant international presence. The Company was amongst the pioneers in generation of electricity in India more than a century ago. The Company has an installed generation capacity of 6,075 MW in India and a presence in all the segments of the power sector viz. Generation (thermal and hydro), Transmission and Distribution.

The Company is present across the entire value chain of power business viz. Generation, Transmission, Distribution, Power Trading, Power Services, Coal Mines and Logistics, Solar PV manufacturing and associated Engineering, Procurement and Construction services (EPC), Consumer facing businesses such as solar rooftop, solar pumps, EV charging, home automation and microgrid.

The Company has presence in all the segments of power sector, viz. Fuel & Logistics, Generation (thermal, hydro, solar and wind), Transmission, Distribution and Trading. It has successful public-private partnerships in Generation, Transmission and Distribution in India namely 'Tata Power Delhi Distribution Limited' with Delhi Government for distribution in North Delhi, Powerlinks Transmission Ltd.' with Power Grid Corporation of India Ltd. for evacuation of Power from Tala hydro plant in Bhutan to Delhi and Maithon Power Ltd.' with Damodar Valley Corporation for a 1,725 MW Mega Power Project at Jharkhand.

Tata Power is one of the largest renewable energy players in India and has developed the country's first 4000 MW Ultra Mega Power Project at Mundra (Gujarat) based on super-critical technology. Tata Power has signed a Distribution Franchisee Agreement (DFA) with Ajmer Vidyut Vitran Nigam Limited (AVVNL) and formed a Special Purpose Vehicle (SPV) 'TP Ajmer Distribution Limited' (TPADL), to cater to the power requirements of customers in Ajmer. Tata Power's international presence includes strategic investments in Indonesia through 30% stake in the leading coal company PT Kaltim Prima Coal (KPC) in Singapore through Trust Energy Resources to securitise coal supply and the shipping of coal for its thermal power generation operations; in South Africa through a joint venture called Cennergi' to develop projects in South Africa, Botswana and Namibia; in Australia through investments in clean coal technologies and in Bhutan through a hydro project in partnership with The Royal Government of Bhutan.

Tata Power Company Limited was incorporated in September 18, 1919. The Company commissioned its first hydro electric power generating station commissioned at Khopoli in the year 1915 with an installed capacity of 40 MW, which was subsequently upgraded to 72 MW. In the year 1922, they commissioned another hydro power station at Bhivpuri with an installed capacity of 40 MW, subsequently upgraded to 72 MW. In the year 1927, they set up Third Hydro power station of 90 MW capacity at Bhira, which was subsequently upgraded to 150 MW.

In the year 1956, the company set commissioned a major thermal power station of 62.5 MW capacity at Trombay, to meet the increasing demand of electricity. Also, they set commissioned two more thermal units of similar capacity i.e. 62.5 MW in the years 1957 and 1960 respectively. In the year 1965, they set up Fourth thermal unit of 150 MW capacity at Trombay.

In the year 1984, the company commissioned India's first 500 MW generating unit with multi-fuel burning capability at Trombay. In the year 1990, they set up Second 500 MW thermal unit at Trombay. In the year 1994, the company commissioned a gas-based 180 MW capacity combined cycle plant to provide quick-start capacity to Trombay Thermal Station and to ensure reliable and uninterrupted supply for essential services in Mumbai.

In the year 1996, the company commissioned the 150 MW Pumped Storage Unit at Bhira. Also, they set up 67.5 MW Thermal Power Plant at Jojobera (Jharkhand). In the year 2000, The Tata Hydro-Electric Co. Ltd., The Andhra Valley Power Supply Co. Ltd., and the Tata Power Co. Ltd., are amalgamated to become one entity- The Tata Power Company Limited. Also, they commissioned a unit of 120 MW at Jojobera.

In the year 2001, the company set up 81.3 MW diesel generator based plant at Belgaum, Karnataka. In the year 2003, the company entered into a joint venture with PowerGrid Corporation of India Ltd., to develop a 1200 Km long transmission line to bring electricity from Bhutan to Delhi. In the year 2004, the company incorporated a wholly owned subsidiary company, known as Tata Power Trading Co. Ltd. for the power trading business. In the year 2005, the company commissioned the unit 4 of 120 MW capacity at Jojobera.

In the year 2006-07, the company completed the acquisition of 30% equity in Indonesian Coal Mines, PT Kaltim Prima Coal (KPC), and PT Arutmin Indonesia, as well as trading companies from PT Bumi Resources. In the year 2008, the unit 1 of 2 x 45 MW Phase of Haldia Project is synchronised with the grid. Also, the company commissioned the expansion project of 250 MW (Unit # 8) at Trombay.

During the year 2009-10, the company successfully completed the overhaul of Unit 5 during which the Unit underwent major renovation and modernization. The company commissioned Unit 3 of 30 MW, resulting in increase in the installed capacity of the plant to 120 MW. These Units use hot coke oven gas from Hooghly Metcoke and Power Company Limited to produce steam for power generation. Also, the company commissioned an additional 42 MW of wind power capacity, taking the total capacity to 201 MW.

During the year 2010-11, the company commissioned an additional 6 MW of wind power capacity in Maharashtra, taking the total installed wind power capacity in Mumbai Operations to 106 MW. Also, the company acquired a 21 MW wind farm, taking the total installed capacity outside Mumbai operations to 122 MW.

In 2012, Tata Power commissioned a 25 MW solar plant at Mithapur in Gujarat. During the year under review, Tata Power commissioned 1050 MW Maithon power project. During the year under review, Tata Power acquired 26% stake in large mines at PT Baramulti Suksessarana Tbk (BSSR), Indonesia. In 2013, Tata Power implemented the first 4000 MW Ultra Mega Power Project of India at Mundra, Gujarat based on super critical technology.

In 2014, Tata Power exited from Indonesian coal mine PT Arutmin Indonesia. During the year under review, Tata Power acquired a 39.2 MW wind farm near Dwarka, Jamnagar in Gujarat. During the year under review, Tata Power commissioned 28.8 MW solar power project at Palaswadi in Maharashtra. During the year under review, the company completed the commissioning of 32 MW Wind farm project in Maharashtra. In 2015, Tata Power's Joint-Venture Maithon Power Limited (MPL) commenced flow of energy to Kerala on a Long Term Agreement basis.

In 2016, Tata Power's Joint-Venture commissioned 120 MW Itezhi Tezhi hydro power project in Zambia. During the year under review, Tata Power partnered with Toshiba and Cargill to design and develop India's first green, safe and compact natural ester-based pad mount substation.

On 12 June 2016, Tata Power Company (Tata Power) announced that its 100 percent subsidiary Tata Power Renewable Energy (TPREL) has signed share purchase agreement (SPA) with Welspun Energy (WEPL) to acquire its subsidiary Welspun Renewables Energy (WREPL). This represents the largest transaction in renewables space in India. WREPL has one of the largest operating solar portfolios in India spread across ten states. It has about 1,140 MW of renewable power projects comprising of about 990 MW solar power projects and about 150 MW of wind power projects. Out of 1,140 MW renewable portfolio, nearly 1,000 MW of capacity is operational and balance capacity is under advanced stages of implementation.

On 19 August 2016, Cennergi, Tata Power's 50:50 joint venture with Exxaro Resources in South Africa, announced the commencement of commercial operations for its 95 MW Tsitsikamma Community Wind Farm (TCWF) project. Cennergi was selected as the preferred bidder for two wind projects under the second window of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) by the South African government. With the commissioning of the Tsitsikamma project, Cennergi's operational portfolio has increased to 229MW.

In 2017, Tata Power's 100 percent subsidiary Tata Power Renewable Energy commissioned 100 MW wind farm in Andhra Pradesh. During the year under review, Tata Power executed Distribution Franchisee Agreement (DFA) for electricity distribution in Ajmer City.

On 2 January 2018, Tata Power Renewable Energy Ltd. (TPREL), Tata Power's wholly-owned subsidiary, announced the commissioning of its 50 MW DCR solar plant at Pavagada Solar Park in Karnataka. The project was won by the company on 4 April 2016 under the National Solar Mission Phase-II Batch-II Tranche-I State Specific Bundling Scheme.

On 8 January 2018, Tata Power announced that it has set up additional electric vehicle charging stations at strategic locations thereby making Mumbai truly ready to usher in the Electric Vehicle wave. The latest Electric Vehicle charging stations by Tata Power have been set up at Palladium Mall Lower Parel, and Phoenix Marketcity, Kurla; and two more coming up at BKC and western express highway at Borivali.

On 26 March 2018, Tata Power announced that the company's Board has approved the sale of its shares in Tata Communications and Panatone Finvest to Tata Sons and its affiliates. Panatone Finvest holds 30.1% of Tata Communications. The move is a part of the company's plan to monetize its non-core assets and improve the balance sheet to set the stage for next phase of growth. The estimated realisation will be about Rs 2150 crore and is subject to shareholders' approval.

On 29 March 2018, Tata Power announced that its Board has approved the sale of its Defense business to Tata Advance Systems Limited, a wholly owned subsidiary of Tata Sons at an enterprise value of Rs 2230 crore (out of which Rs 1040 crore payable at the time of closing and Rs 1190 crore payable on achieving certain milestones), subject to Government & other approvals. This is as part of the company's plan to monetize its non-core assets and improve the balance sheet.

On 11 July 2018, Tata Power announced that its wholly owned subsidiary Tata Power Renewable Energy Limited (TPREL) has received a Letter of Award from Karnataka Renewable Energy Development Limited (KREDL) to develop 250 MW (50 MW x 5 Nos) of solar projects located in state's Tumkur district at Karnataka.

On 27 September 2018, Tata Power and Hindustan Petroleum Corporation Limited (HPCL), a Navratna Oil & Gas Public Sector Undertaking, announced the signing of a Memorandum of Understanding (MoU) for setting up commercial-scale charging stations for Electric Vehicles at the HPCL retail outlets and other locations across India. Tata Power and HPCL, through this new landmark MoU, have agreed to collaborate in planning, development and operation of charging infrastructure for electric vehicles (e-cars, e-rickshaws, e-bikes, e-buses, etc.), at suitable locations across India. Both entities also intend to additionally explore areas of opportunities & collaboration in related fields like Renewable Energy.

As on 31 March 2019, the Company had 50 subsidiaries (40 are wholly-owned subsidiaries), 38 Joint Ventures (JVs) and 6 Associates.

The company decided to sell Strategic Engineering Division(SED) to Tata Advanced Systems Limited, a wholly owned subsidiary of Tata Sons Private Limited at an enterprise value of Rs 2,230 crore.

As on 31 March 2019, the Tata Power group of companies had an operational generation capacity of 10,957 MW from various fuel sources - thermal (coal, gas and oil), hydroelectric, renewable energy (wind and solar PV) and waste heat recovery.

During the FY2020,TP Kirnali Limited was incorporated as wholly owned subsidiary of Tata Power Renewable Energy Ltd(TPREL) and TP Solapur Limited was incorporated as wholly owned subsidiary of TPREL.Also during the year, Gamma Land Holdings Limited, Beta Land Holdings Limited and Ginger Land Holdings Limited are three JVs which ceased to exist.

As on 31 March 2020, the Company had 54 subsidiaries (40 are wholly owned subsidiaries), 30 Joint Ventures (JVs) and 5 Associates.

As on 31st March 2020,the company has an installed capacity of 12,742 MW, out of which 3,883 MW is from 'Clean and Green sources' (Hydro, waste heat recovery, wind and solar) which constitute about 30% of the total portfolio.

Subsequent to approval accorded by the shareholders at the 101st Annual General Meeting of the Company on 30 July 2020, the Company issued and allotted 49,05,66,037 Equity Shares of the Company to its Promoter, Tata Sons Private Limited, at a price of Rs 53 (including a premium of Rs 52) per Equity Share, aggregating up to Rs 2,600 crore, for cash consideration, on a preferential basis.

During the FY2021, Company has filed the following schemes of merger with the Hon'ble National Company Law Tribunal (NCLT), Mumbai Bench,a. Scheme of Amalgamation of Af-Taab Investment Company Limited with the Company and Composite Scheme of Arrangement of Coastal Gujarat Power Limited and Tata Power Solar Systems Limited with the Company along with capital reorganisation after the merger.These schemes are pending approvals from Regulatory authorities including NCLT. However Given the changes in business environment, the Board of Directors in the meeting held on 1st July, 2021, have approved modification in the existing Composite Scheme. As per the proposed modification, the proposed merger of TPSSL with the Company and consequential changes or effect thereupon, shall be withdrawn from the Composite Scheme.

During the FY2021,the company has incorporated 5 new subsidiaries namely, TP Kirnali Solar Limited, TP Solapur Solar Limited,TP Saurya Limited, TP Akkalkot Renewable Limited and TP Roofurja Renewable Limited.

As on 31 March 2021, the Company had 59 subsidiaries (44 are wholly owned subsidiaries), 33 JVs and 5 Associates.

As on 31 March 2021, the Company had an installed capacity of 12,808 MW out of which 3,948 MW is from 'Clean and Green sources' (Hydro, waste heat recovery, wind and solar) which constitutes about 31% of the total portfolio.

During the quarter ended 30 June, 2021 , the Company has acquired 51 % stake in TP Northern Odisha Distribution Limited ('TPNODL') for Rs 191 crore. TPNODL is the licensee to carry out the distribution and retail supply of electricity covering the circles of Balasore, Bhadrak, Baripada, Jajpur and Keonjhar in the state of Odisha for a period of 25 years effective 1st April 2021.

During the quarter ended 30th September 2021, the Holding Company has sold its investment in Trust Energy Resources Pte. Limited (TERPL), a wholly owned subsidiary to Tata Power International Pte Limited, another wholly owned subsidiary for a consideration of Rs 2127 crore.

As on March 31, 2022, the Company has an installed capacity of 13,515 MW out of which 4,655 MW is from 'Clean and Green sources' (Hydro, waste heat recovery, wind and solar) which constitute about 34% of total portfolio.

During the year 2022, the Company has acquired NESCO Utility through TP Nothern Odisha Distribution Limited (TPNODL) in Odisha. It acquired NRSS XXXVI Transmission Limited through, Resurgent Power Ventures Pte. Limited. It has launched smart energy solutions through IoT based Home Automation solutions, smart energy management tools and various other home automation products to implement efficient and cost-effective solutions to manage electricity usage. It increased 684 MW Solar PV assets in operating portfolio for supply of power to Discoms and captive consumers and around 23 MW of rooftop projects. Its subsidiary, Tata Power Solar Systems Limited (TPSSL) has commissioned 1.5 GW of Utility scale projects.

The National Company Law Tribunal, Mumbai Bench, vide its Orders dated March 31, 2022 and March 15, 2022 approved the Composite Scheme of Arrangement between CGPL and the Company and their respective shareholders and Scheme of Amalgamation of Af-Taab Investment Company Limited (Af-Taab) with the Company. The Appointed Date of both the Schemes was April 1, 2020.

During the year 2021-22, the Company acquired 51% stake in TP Northern Odisha Distribution Limited. TP Solapur Saurya Limited was incorporated as a subsidiary of the Company. Coastal Gujarat Power Limited and Af-Taab Investment Company Limited merged with the Company. Tatanet Services Limited merged with its subsidiary, Tatanet Services Limited. TCL Ceramics Limited and Koromkheti Georgia LLC ceased to be subsidiaries of the Company.

During year 2023, the Company through Resurgent Power Ventures Pte. Limited acquired NRSS XXXVI Transmission Limited and South East U.P. Power Transmission Company Limited. It commissioned third unit of 67.5 MW Co-generation Plant at Kalinganagar, Odisha in 2023. It commissioned 196 microgrids with an installed capacity of 5.88 MW.