Smoke rises from a chimney as electricity pylons stand at the Tata Power Co. Trombay Thermal Power Station in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

Tata Power Confident Of Winning More Projects In Rajasthan

Tata Power Ltd. is confident of winning more transmission and power distribution projects in Rajasthan as they come up for bids, its Managing Director and Chief Executive Officer Praveer Sinha said.

“We have a huge appetite and we are looking it as the next big growth area for us,” Sinha told BloombergQuint. “These opportunities do not require large amount of investment.”

Rajasthan has been a great experience for the company and we have been able to trim transmission losses in the state, he said. “The losses have narrowed to 12 percent from 22 percent in Ajmer in the last one-and-a-half years.”

Sinha said that the opportunities in India have improved than in the overseas markets for power generation business.

We expected opportunities in the overseas market. Unfortunately, we could not find that due to local challenges there. Therefore, we decided to focus more on Indian market than overseas to improve our business. 
Praveer Sinha, Managing Director And Chief Executive Officer At Tata Power

Commenting on the power purchase agreement in Mumbai which is set to expire next year, Sinha said that Mumbai's public body electricity provider—Brihanmumbai Electric Supply and Transport—is keen to extend PPA with the company for the next five years.

Shares of Tata Power rose as much as 2.8 percent to Rs 81.30 apiece, compared to 0.74 percent advance in the NSE Nifty 50 Index.

Watch the full interaction here:

Key highlights from the conversation:

On divestment:

  • Will continue to divest holdings in the non-core businesses.
  • Expect consolidation to secure funds for growth plans.
  • Will divest several standalone global projects which lack strategic growth
  • Expect large number of divestments over the next 15 months.

On Power Tariff:

  • The Supreme Court has given eight weeks time to conclude the amendment of PPA.
  • Gujarat government has directed state DISCOM to amend PPA.
  • Other state governments are also examining the PPAs
  • There is no single solution for various stressed power projects in India. Every unit must be assessed on their individual challenges.
  • Tariffs remain lowest despite revision.
  • Revised tariffs still benefit DISCOMS more than power producers.

On Indonesian Mines:

  • There was a delay in receiving money from Arutmin stake sale as promoters faced financial difficulty.
  • However, the existing Arutmin promoters are in a much better financial condition as export coal prices have increased.
  • Have received $50 million over the last six months from overall payment of about $155 million.
  • Expect to receive about $100 million in the next one year and the remaining thereafter.
  • On KPC, we have 30 percent stake in it.
  • KPC is directly linked to coal procurement from Mundra Plant and thus have no plans to sell stake in it.

On Renewable Business:

  • Expect to grow renewable business at a large scale.
  • Eyeing to enter 100 cities.