Debt, cashflow from biz to fund Tata Power capex: N Chandrasekaran

Chandrasekaran said, the company has expanded into so many different areas now, each of these areas focusing on growth and cash flow generation

Tata Power looks to fund its capital expenditure (capex) through debt and cash flow generated from its multiple businesses, said company chairman N Chandrasekaran.

The chairman was addressing the company’s shareholders at its annual general meeting (AGM) on Tuesday.

He said, “The company will generate a lot of operating cash flow primarily because we are growing in all segments.”

Chandrasekaran added, “The company, for a long time, had a weight of the underperforming or loss-making Mundra, which was weighing down the company and that problem is intermittently getting solved.”

He said Tata Power has expanded into so many different areas now. In each of these areas, the company is focusing on growth and cash flow generation.

The chairman informed the shareholders that the company plans to invest Rs 20,000 crore as capex in the current financial year, across renewable, distribution and transmission segment. This is over and above the Rs 12,000 crore spent in the last financial year.

In terms of new business, Chandrasekaran added, “(In nuclear power), the only area we will be open to is what is called the small modular reactors when the opportunities come and the government allows the company to look at entering that field.”

He further said, “The company is also evaluating multiple storage technologies, including battery.”

Tracking the company’s transformation over the last few years, Chandrasekaran added, “The last four or five years the company's strategy has significantly changed. It has now become a multi-segment integrated power company. Tata Power Company now should be looked at as industrial as well as consumer.”

In the distribution business, the chairman said the company looks to expand its consumer base from the current 12.5 million consumers to over 50 million. 

As of March, Tata Power’s consolidated debt was at Rs 49,480 crore. It has a long-term capex plan of Rs 60,000 crore spread over the next few years.