Will Tata Group’s Rs. 20,000 crore Move Shake Up the Ambani-Adani Dominance? Know Ratan Tata’s Strategic Planning Here
Will Tata Group’s Rs. 20,000 crore Move Shake Up the Ambani-Adani Dominance? Know Ratan Tata’s Strategic Planning Here
Tata Power plans to invest Rs. 20,000 crore in capex this year, primarily in green energy, nearly doubling last year’s investment. This expenditure for FY25 focuses on renewable energy and transmission and distribution businesses. This announcement was made on Tuesday (16th July) at the 105th Tata Power AGM meeting.
The previous investment follows Rs. 12,000 crore invested in FY24, reported N Chandrasekaran, Chairman of the Tata Group. Tata Power AGM aims to expand its clean energy portfolio to 15 GW in five years from the current 9 GW.
Similarly, Tata Power will explore small modular nuclear reactors and new distribution opportunities in other states once government permissions are obtained. Next, they are planning to set up a 4.3 GW dollar cell and module manufacturing plant in Tamil Nadu. Not only this, the company has installed 5,500 public and captive EV chargers in over 530 cities and 86,000 home chargers.
Let us know the strategic planning of Tata versus its rivals in detail:
Primarily, Tata Group’s investment will be financed through a combination of debt and the company’s internal cash flow. This mixed funding approach will help balance financial risk and leverage the company’s resources. Whereas, Reliance Industries led by Mukesh Ambani, has announced a massive $7.5 billion commitment to the green energy sector. Their strategy encompasses the entire value chain, from solar power generation to the production and distribution of green hydrogen. Moreover, 4 Giga factories are under construction at the Dhirubhai Ambani Green Energy Complex in Jamnagar, Gujrat.
Under the leadership of Gautam Adani, the Adani Group has pledged to invest Rs. 2.3 Lakh crore by 2030 in renewable energy. An initial investment of $9 billion is planned for their green hydrogen business, with $4 billion allocated for machinery and manufacturing plants and $5 billion for developing a 5 GW electrolyser manufacturing capacity.
Strategic Planning and Implication for Tata Group:
Tata Group aims to establish a strong foothold in the green energy market, positioning itself as a formidable competitor to Reliance and Adani. Tata Group also aims to attract 5 crore customers while the current customer trend is more than 1.25 crore. The company has already executed over 2 GW of rooftop solar projects and has an order book of Rs. 2,800 crore.
The Board of Directors recommended a dividend of Rs. 2 per equity share, signalling confidence in the company’s financial health. This intense move of the investment’s reactions can be seen to reflect in the share market.
While, the share market value of Tata Power with a market cap of Rs. 1.40 lakh crore, fell by only Rs. 437 on Tuesday (16th July), on average the company’s all-time share value is as high as Rs. 464.20 to a low level up to Rs. 216.75.
If we talk about the return, Tata Group in the last five years, has delivered a whopping 556.65% return. It has increased investor’s money sixfold. This is a multi-bagger stock from the Tata Group.
In summary, Tata Group’s Rs 20,000 crore investment in renewable energy marks a pivotal step in the company’s strategic direction, enhancing its competitive edge against industry giants like Ambani and Adani. This investment is poised to foster innovation, reduce costs, and boost efficiency in green energy projects, ultimately supporting India’s ambitious renewable energy goals.
