Tata Power Renewable Energy Raises $63 Million To Retire Debt
The renewable energy arm of one of India’s leading private sector power generators may be getting ready to chart an ambitious plan to expand its footprint into the country’s renewable energy sector.
Tata Power Renewable Energy Limited, a fully-owned subsidiary of Tata Power Limited, recently raised Rs 425 crore (US$63 million) through issuing non-convertible debentures (NCDs), which will be used for retiring debt acquired at higher rates.
This entire process of raising funds through NCDs is expected to be a very efficient method of retiring debt. Investors of NCDs will be paid interest linked to the base rate of State Bank of India which is expected to drop over the next few quarters. The Reserve Bank of India has reduced interest rates sharply over the last few quarters and is expected to do the same in the near future. The company would very well have raised debt before the recent rate cuts.
Tata Power Renewable Energy was recently launched as a separate company out of Tata Power, which transferred control of renewable energy assets to its new subsidiary. Tata Power Renewable Energy Limited controls operational capacity of 720 MW and under construction capacity of 250 MW. The new company may also look for equity investments and scout for candidates for acquisition.
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