Lead Story

Can NTPC steal Adani Green’s thunder?  

The solar pageant is between two contestants – one is young and aggressive, and the other is staid and pragmatic


It’s a fairy tale that calls to mind the Snow White one. This one has a 46-year-old (NTPC) and a seven-year-old (Adani Green). But unlike the Grimm brothers’ story, in which the stepmother covets primacy, this narrative has the seven-year-old yearning to be the queen of renewables.

Every time the young one asks the mirror (Mr Market), “Who is the worthiest of them all?,” the mirror replies, “It’s you with a valuation of 84x (price/book value).” When she persists and asks, “What about the 46-year-old”, the mirror replies, “She is worth just 0.8x!” Both times, the mirror is masking the truth – as valuations of neither reflect their true worth.

For instance, the good old public sector undertaking (PSU) is a powerhouse that literally lights up the nation – with an installed capacity of 65.8GW, it accounts for one-fourth of the electricity generated in the country. Once the toast of the town, NTPC is struggling for relevance in a changing landscape, in which burning coal to produce electricity is frowned upon. Instead, generating power from solar, wind and water is venerated as India is now party to the Paris climate accord that entails bringing down carbon emission intensity of GDP by 33-35% by 2030. India is also committed to ensuring that 40% of its installed power capacity is from non-fossil sources by 2030 with an interim target of 175 GW of non-hydro renewables by 2022 and 450 GW by 2030. Though India will miss its 2022 target (See: Missing the mark) given that the total installed capacity, as of FY19, in place is 78 GW, the movement to renewable is gathering momentum.