Tata Power Company Limited · NSE:TATAPOWER
Tata Power — Investor Presentation (August 2020)
54 slides from Tata Power's investor presentation, Aug 19, 2020
Slide 1: Presentation to Analysts - exchange filing cover letter
19th August 2020 BJ/SH-L2/ BSE Limited National Stock Exchange of India Limited Corporate Relationship Department Exchange Plaza, 5th Floor, 1st Floor, New Trading Ring, Plot No. C/1, G Block, Rotunda Bldg., P. J. Towers, Bandra-Kurla Complex, Dalal Street, Fort, Bandra (East), Mumbai 400 001. Mumba
Slide 2: Tata Power 2.0 - Lighting up a Billion Lives
Tata Power 2.0 Lighting up a Billion Lives 19th August 2020 …Message Box ( Arial, Font size 18 Bold)
Slide 3: Disclaimer
Disclaimer This document does not constitute or form part of and should not be construed as a prospectus, offering circular or offering memorandum or an offer to sell or issue or the solicitation of an offer to buy or acquire securities of the Company or any of its subsidiaries or affiliates in any
Slide 4: Table of contents
Table of contents 1. Overview 2. Secure Financial Fitness 3. Deliver Growth at Scale through: a. Renewables b. Distribution c. Thermal & Hydro d. New Energy Businesses 4. Long term Strategy for Sustainable Growth and Value Creation …Message Box ( Arial, Font size 18 Bold)
Slide 5: Tata Power - Leading transition to a New Energy World
Tata Power - Leading transition to a New Energy World THERMAL & HYDRO ➢ 21 MTPA coal ➢ 8.8 GW thermal SOLAR SOLUTIONS ➢ 1.3 GW hydro & ➢ Solar EPC waste heat ➢ Rooftop solar ➢ Solar Pumps ➢ Microgrids RENEWABLES LARGEST NEW-AGE ➢ 2.6 GW EV CHARGING INTEGRATED TECHNOLOGY operating Gearing up Key part
Slide 6: Creating a FUTURE READY Tata Power
Creating a FUTURE READY Tata Power Create Shareholder value • Improve RoE • Benchmark D:E & Debt/EBITDA levels 05 Sustainability Benchmark • Phase out Thermal Capacity • Increased Clean & Green Capacity 04 Deliver Growth at Scale • Benchmark Water & Waste Management • Large scale Renewable Energy po
Slide 7: Secure Financial Fitness
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Slide 8: Restructuring to make Mundra self sustaining
Restructuring to make Mundra self sustaining NATURAL HEDGE FROM COAL INVESTMENTS REDUCE MUNDRA DEBT TO ADDRESS CGPL DEBT SERVICEABILITY CGPL & Coal Cos. Combined Profit (last 3 Sustainable Combined Cash Profits* (in ₹ cr) years) (in ₹ cr) 800 FY18 FY19 FY20 550 2,000 600 1,500 400 1,000 650 (300) PA
Slide 9: Strong Balance Sheet for Growth
Strong Balance Sheet for Growth FOCUS ON DELEVERAGING SINCE 2018 SIMPLIFY BUSINESSES - 95 TO <40 ENTITIES BY FY 22 - Transactions worked upon over last 2 yrs to be closed in FY 21 - Merge businesses, retain only JVs & SPVs for reg requirements ➢ Simplify holding structures & reporting 43,578 ➢ Effic
Slide 10: Asset Light Structures for multi fold growth
Asset Light Structures for multi fold growth INVESTMENT INFRASTRUCTURE TRUST (INVIT) FOR RENEWABLES (RE) BY 2021 RESTRUCTURE RE ASSETS ➢ Deconsolidate debt by sale of >50% stake in operational projects ➢ Release capital for debt reduction ➢ Lowering cost of capital through long term and patient co-i
Slide 11: Deliver Growth at Scale
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Slide 12: Renewables
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Slide 13: Capitalising on India's Shift Towards Renewable Energy
Capitalising on India’s Shift Towards Renewable Energy INDIA’S COMMITMENT ON CLEAN POWER IN LINE WITH FY30 RE TARGET 500 GW HUGE POTENTIAL OF 1,300 GW 749 Solar Wind FY 30 RE Capacity Target 350 135 15 Others 302 210 23 20 Solar Wind Solar Biomass Small Solar Potential (in GW) Wind Potential (in GW)
Slide 14: Tata Power's Renewables capability
Tata Power’s Renewables capability EPC & Wind Solar Group Captive Roof Top Solar Solar Pumps Microgrid Manufacturing Generation Generation Capacity Capacity • Over Over22 GW GW 0.9 GW of Commissioned Commissioned Commissioned Commissioned No. No. 11 Roof top Roof top Market leader Market leader Comm
Slide 15: Diversified Generation Portfolio
Diversified Generation Portfolio Total RE Portfolio 75% of Procurers Highly Rated 4,152 MW # <B SECI & NTPC 19% 10% Solar Wind PB 36 0.5 3220 MW # 932 MW TPC - B+ 1 7% Distribution 215 1.6 UP 1.2 16% 375 100 RJ BH 185 40.7 100 130 5.5 520 MP A & A+ 194 44 GJ 48% MS 150 134 239 TS Diversified Tariff
Slide 16: Utility Scale Operations
Utility Scale Operations KEY MARKET ASSUMPTIONS FY 25 2 GW p.a. organic growth ~ 15 GW • FY21 & FY22 → 10-15 GW/ Year bids for 100 GW solar target • FY23-25 → 100 GW Solar + Hybrid / Storage market leading to market FY 22 of ~ 15-20 GW/ year • In coming years, pure solar and wind bids are likely to
Slide 17: Tata Power Solar - One of the largest EPC Players in India
Tata Power Solar - One of the largest EPC Players in India 1 Utility Scale Projects Over 5 GW of Projects Around 2000 MW projects commissioned and 3000 MW in pipeline. Commissioned 100 MW for NTPC in AP - India’s largest solar plant with domestically manufactured modules Includes projects currently
Slide 18: EPC Utility Scale
EPC Utility Scale ESTIMATED UTILITY SCALE EPC MARKET (GW) PREFERRED EPC PARTNER OF DEVELOPERS 15 15 20 20 20 Self EPC, Market Share FY21 FY22 FY23 FY24 FY25 40% Third Party of Self EPC and EPC, 60% Third Party 2.5 3.5 4 4 4 Growth Targets (GW) Market Share by 2025 ~ 20% Key Market Trends/ Assumption
Slide 19: Rooftop Solar
Rooftop Solar ALL INDIA EXPECTED TO GROW TO 20 GW BY FY25 GEARING FOR LEADERSHIP Cumulative Rooftop Installation (GW) 20.2 Residential Govt 425+ MW installed Commercial & Industial 10.4 Ranked No 1 for 6 yrs in ₹ 860+ cr order 5.7 3.8 row book 100 cities & 24/7 monitoring; 174 channel iTaps app for
Slide 20: Solar Pumps
Solar Pumps ESTIMATED ALL INDIA SOLAR PUMPS MARKET MARKET LEADERSHIP - 5% TO 15% SHARE BY FY25 40 Off-Grid 1,138 1,200 On-Grid 200 18% Market Size (INR ‘000 Crs) 16% 900 Thousands 1,000 15% Number of Pumps (‘000) No. of Pumps - Annual 180 16% 30 160 13% 14% 694 13 800 140 11% 12% 120 9% 12 10% 503 1
Slide 21: Microgrids - Transforming Rural India
Microgrids - Transforming Rural India CATALYZE ECONOMIC GROWTH BY CATERING TO LATENT DEMAND No. of villages >15,000 6,500 - 15,000 <6,500 25,000 15,000 10,000 New entrepreneurs New entrepreneurs New green jobs in agribusiness in water & irrigation entrepreneurs Utter Assam Rajasthan Pradesh Bihar Jh
Slide 22: Technology in Operations
Technology in Operations State of the art Central Control Room Use of Drones for detecting offline strings, hot spots, E-Security along with Drone Surveillance (for effective real time Monitoring & Analysis of RE diode faults, reverse polarity, string mismatch, micro cracks assets) & surface faults.
Slide 23: Technology in Execution
Technology in Execution IOT enabled Complaint Logger in I-Taps DIY + m-inverter + Home Automation Robotic Cleaning Dashboarding through Mobile Apps in Aesthetic Carport Remote Monitoring of Pumps - NOC Pumps & Microgrids …Message Box ( Arial, Font size 18 Bold) 22
Slide 24: Creating a Scalable Model for multi-fold growth
Creating a Scalable Model for multi-fold growth MULTIFOLD GROWTH IN RE CAPACITY EXPAND MARKET SHARE IN EPC, ROOFTOP & PUMPS FY 25 Renewable Energy Capacity (GW) TPSSL All Business Revenue (in ₹ cr) 10.9 15 + M&A >22,000 1.5 2.6 2,141 Existing RE Pipeline Growth FY 25 Target FY 20A FY 25 Target Capac
Slide 25: Distribution
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Slide 26: 25 Lakh Crore Power Sector investment over next 5 yrs
25 Lakh Crore Power Sector investment over next 5 yrs Power Capex from FY 21-25 (figs in Rs '000 Crs) FY 25 Distribution Targets AT&C losses ACS-ARR Gap Rs p.u. 156 327 19.08% 457 0.41 10% 0 304 930 FY 20E FY 25 Target FY 20E FY 25 Target 323 100% Smart Metering for all categories by FY 25 Source :
Slide 27: Emerging Opportunities in Transmission
Emerging Opportunities in Transmission SLOW PROGRESS DUE TO: KEY CHALLENGES: RoW issue Low IRR in TBCB projects Long gestation period ₹ 43000 CR – 56000 CR TBCB PROJECTS IN NEXT 5 YEARS M&A OPPORUNITIES THROUGH PLATFORM Inter-regional corridor Green Energy Corridor TBCB Projects of Private Developer
Slide 28: Distribution
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Slide 29: Widespread Discom stress affecting the entire value chain
Widespread Discom stress affecting the entire value chain ANNUAL REVENUE OF ₹ 5.8 LAC CR FROM POWER BUT STILL HIGH DISCOM LOSSES DUE TO STRUCTURAL ISSUES – DISTRIBUTION widespread across states AT&C Losses (%) ACS-ARR Gap (₹./Unit) 275 Mln Customers across India (as of 31st March 2019) 94% 5% 0.70%
Slide 30: Major Reforms likely to address structural issues
Major Reforms likely to address structural issues NATIONAL TARIFF POLICY ELECTRICITY AMENDMENT BILL • Reduction of capped cross subsidy • Opening power distribution to gradually franchisee and sub-licensee business • Cap on AT&C losses recoverable in tariff • Power tariff to be determined with no •
Slide 31: Significant Privatization opportunities on the horizon
Significant Privatization opportunities on the horizon ODISHA UP MP NESCO / WESCO / SouthCo PuVVNL Bhopal / Jabalpur 4.8 M Customers 8.2 M Customers 10.2 M Customers RAJASTHAN JHARKHAND 8 UNION TERR. Jaipur / Jodhpur Jamshedpur / Ranchi >3 M Customers 8.4 M Customers 1.4 M Customers States & UTs wit
Slide 32: Our unparalleled experience in Distribution
Our unparalleled experience in Distribution LARGEST PRIVATE DISTRIBUTION COMPANY (CUSTOMERS) LARGEST T&D PRIVATE CONSULTANT ACROSS 22 STATES No of Consumers - FY 19 (in Mln) 2.7 5.3 ➢ 60+ Clients across states 4.3 ➢ Offering end to end solutions 3.9 from Project to Process 3.3 3.0 2.6 outsourcing ➢
Slide 33: Using Technology to create an 'Utility of the Future'
Using Technology to create an ‘Utility of the Future’ Integrated ‘Advanced Distribution Management System’ for advanced, real time monitoring & control of operations …Message Box ( Arial, Meter Data Management Enhancing customer Font size experience using Microsoft Kaizala 18 Bold) 32
Slide 34: Multifold Expansion of our Distribution Footprint
Multifold Expansion of our Distribution Footprint EXPAND CUSTOMER FOOTPRINT ACROSS STATES TRANSMISSION EXPAND DIST SERVICE BUSINESS - 2-3 licenses through PPP; Selective DF - Regulatory growth - Technology driven businesses opportunities through Hybrid Models Strengthening Mumbai 20 Mln Smart Meters
Slide 35: Thermal & Hydro
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Slide 36: Carbon Neutral by 2050
Carbon Neutral by 2050 GROWTH OPERATIONAL EXCELLENCE • No New Coal Capacity • Coal Blending for fuel efficiency • Waste Heat Recovery / Gas plants - Captive • Reduce downtime through RCM & Advance • Selective opportunities in Hydro if policy in Pattern Recognition conducive such as Hydro RPOs • Effi
Slide 37: New Energy Businesses
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Slide 38: India - The Next Frontier for EVs
India – The Next Frontier for EVs ELECTRIC CAR SALES GROWTH (2015-2019 AVG.) 55% 32% 26% ANNUAL GROWTH ANNUAL GROWTH ANNUAL GROWTH Mainly China Led) EUROPE ASIA AMERICA 41% ANNUAL GROWTH In line with the classic ‘4yr lag with China’ on major interventions. WORLD …Message Box ( Arial, Font size 18 Bo
Slide 39: EV Charging Outlook in India
EV Charging Outlook in India EV PENETRATION ESTIMATED TO PICK UP EVs on Road Annual Running Power Consumption (FY25) (km/ year) (FY25, MU) 10 – 14 mn 10,000 4,600 1 – 1.5 mn 30,000 3,400 0.6 – 1 mn 10,000 1,200 1 – 1.2 mn 45,000 7,000 Fleet 0.02 – 0.03 mn 70,000 2,100 E-Bus 18,300 EV penetration dep
Slide 40: Govt. providing the crucial push
Govt. providing the crucial push 100% Confident: In Nitin Gadkari’s Push for Electric Vehicle Adoption, a Promise of Crores of Jobs “Electric Mobility is India’s Next Big Opportunity” Niti Aayog India can become Electrical Vehicle Manufacturing hub in 5 years India is Power Surplus, E-Mobility Solut
Slide 41: Gearing up to become the Leading Network
Gearing up to become the Leading Network Large Geographical Cutting Edge Digital Key Partnerships Franchisee Development Presence Platform • Anchor demand through tie-ups • Strong local business • Customer-centric • Set-up of multiple channels with OEMs of EV development & installation experience &
Slide 42: The Home Automation Market in India
The Home Automation Market in India SMART HOME INSTALLATIONS IN INDIA ARE EXPECTED TO INCREASE WELL POISED TO LEVERAGE THIS OPPORTUNITY • Rapid adoption of digitization & technology aided by COVID. • Presence in the ecosystem - directly and as a Group • Improved lifestyle and Lower cost of connectiv
Slide 43: ESCO Services
ESCO Services DECADE EXPERIENCE ENERGY SAVINGS ENERGY MANAGEMENT • Audits • Coordination with LDCs • Design/ Retrofit • RPO compliance GRADE 1 CERTIFIED • Implementation of measures • Sale and purchase from exchange ESCO • Financing • Power procurement optimization BUREAU OF ENERGY EFFICIENCY • Meas
Slide 44: New Businesses - Develop sustainable business models
New Businesses - Develop sustainable business models EV CHARGING HOME AUTOMATION ESCO Models to IoT based Value Group Tie- Phase 1 Phase 2 Phase 3 monetize Analytics & added up (FY 21-23) (FY 24-25) (FY 26 +) Data Intelligence services Default End to end Audits, EPC, Proj Mgt, Network RPO compliance
Slide 45: Long term Strategy for Sustainable Growth and Value Creation
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Slide 46: Strategy with a Sustainability focus
Strategy with a Sustainability focus GROWTH IN CLEAN & GREEN CAPACITY UTILITY BENCHMARK • Water Positivity by 2025 • No new coal-based capacity • Zero Waste to Landfill by 2025 • Phase out current coal generation on • CSR Vision 2025 - Empower 353 expiry of residual life / PPAs villages by 2025 • Ex
Slide 47: Long term Strategy for Sustainable Growth
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Slide 48: Restructuring to provide strong foundation for growth
Restructuring to provide strong foundation for growth Asset Sale Simplify Business Sustain debt below below ₹ 25,000 cr beyond FY 21 - Non Core sale - ₹ - Reduce 95 cos to 4,500 cr in FY 21 <40 cos by FY 22 25,000 - 30,000 - InvIT for RE Business - Merge businesses in FY 21 for synergies 60,000 - 65
Slide 49: Scale by adopting innovative and capital light business approach
SCALE by adopting INNOVATIVE and CAPITAL LIGHT business approach 2X CAPACITY GROWTH TO 25 GW – 2/3RD PORTFOLIO ‘CLEAN & 8X CONSUMERS & 2X REVENUE FROM DISTRIBUTION GREEN’ PRIVATIZATION FY 25 CAPACITY MIX ₹ 25,000 Cr ₹ 11,186 Cr 20 Mln Distribution 2.5 Mln Hybrid, Privatization 7,000 Opportunities So
Slide 50: Strong Return Profile & Optimal Capital Allocation
Strong Return Profile & Optimal Capital Allocation REGULATED EQUITY GROWTH TO PROVIDE ASSURED ROE ➢ FGD installations in Maithon & ₹ 3300 Jojobera & Railway infrastructure in Cr Maithon ₹ 1565 Cr ➢ Upgradation of Transmission 5 yr Regulated capex infrastructure in Mumbai FY 25E ~ ₹ 6000 FY 20 – ₹ 24
Slide 51: Create Long Term Shareholder Returns
Create Long Term Shareholder Returns TARGET GROWTH DRIVEN BY RE, DISTRIBUTION & CUSTOMER SERVICE BUSINESS All figures in ₹ crore Revenue Profit after Tax > 2x > 3x 28,948 1,231 FY 20A FY 25 Target FY 20A FY 25 Target TARGET ROE GROWTH WITH IMPROVED CREDITWORTHINESS Return on Capital Employed & Equit
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Slide 53: On track to become the All-round Leader
On track to become the All-round Leader Lead in Utility Sector ESG practices Generation Capacity 25 GW • DSJI Sustainability Index Constituent by 2025 • 60 % ‘Clean and Green’ Portfolio by 2025 RE Capacity 15 GW • Benchmark in Water & Waste Management by ₹ 22k Cr EPC, Rooftop 2025 & Pump Revenue Gro
Slide 54: Thank You!
Disclaimer: The contents of this presentation are private & confidential. Please do not duplicate, circulate or distribute without prior permission. Thank You! Website: www.tatapower.com Email Id: investorrelations@tatapower.com Contact: +91 (0) 22 6717 1305 Private and Confidential | …Message Box (
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