Integrated Annual Report 2021-22
More Power with
better prospects

Our business is powered by the continued trust that our investors place in us. We consider it our fiduciary duty to deliver on their expectations, and we achieve this through operational excellence, continued strengthening of our balance sheet, and efficient capital allocation that supports capex projects and new business ventures.

Key linkages

Material topics

  • Future-ready and business continuity

Deleveraging to power sustainable growth

We have maintained a consistent focus on strengthening our balance sheet by reducing the debt on our books, with an objective of maintaining our leverage ratios well within comfortable levels.

To achieve this, we had initiated a number of actions such as:

  • Divesting non-core investments and assets
  • Raising equity to repay debt
  • Restructuring / monetising the renewable business to unlock value for all our stakeholders while raising funds for growth capital

We have made significant progress on all the above initiatives and have been able to reduce debt. With these initiatives, our D/E ratio, which was more than 2.19 in FY19, has come down to 1.53 in FY22, a very significant improvement.

Further, we have also taken a number of initiatives to improve our working capital cycle, both on the debtors and creditors side. We have been able to facilitate financing arrangements for our suppliers and vendors, so that they are able to provide longer credit periods at very attractive terms. We have also been able to factor as well as arrange bill discounting facilities against our receivables from the Discoms, enabling us to improve our overall collections.

Leveraging the current interest rate scenario, we also pro-actively converted a portion of our short-term loans into long-term, thereby improving our liquidity position and mitigating any refinancing risks.

Our actions on debt management and key outcomes on our financial rations have been positively assessed by both domestic and international credit rating agencies, thus resulting in a rating upgrade during the year.

Business transformation to foster future growth

To future-proof our business, we are undertaking significant strides across multiple levels, and have established specific near-term goals to optimise our growth and market position.

Think Big

From 13.5 GW to over 30 GW Generation capacity in FY27

Sustainability Focus

From 34% to over 80% clean energy portfolio by FY30

Customer @ Centre

From 12 million customer base in FY22 to over 40 million customer base in FY27


From a commodity player to a service provider for the end consumer, through rooftop solar, solar pumps, microgrids, EV ecosystem, home automation and other new age energy solutions

Managing financial capital and growth prospects

We are on a growth trajectory that requires continual investments for projects and ventures, in addition to maintaining optimal operational performance. Our financial capital is powered by a mix of debt and equity sources, apart from our rising cash flows and accruals. As part of our strategy, we are according an undeterred focus on deleveraging, tapping growth and returns from new growth areas, and an increased funding commitment from the promoters.

Strengthening balance sheet

In the recent past, we have offloaded considerable debt from our books through various initiatives including divestment in foreign assets, deploying strategies for input price management and undertaking mergers for better tax efficiency. We are also attracting equity stake in our future-ready Renewables business from world-class investors, potentially unlocking substantial value.

Attracting global capital for RE

Our Board of Directors has approved the raising of ₹ 4,000 crore by Tata Power Renewable Energy Limited (TPREL), wholly owned subsidiary of Tata Power, which will set up India's most comprehensive renewable energy platform. The funds of ₹ 4,000 crore would be invested by a consortium, led by BlackRock Real Assets, along with Mubadala as co-investors, at the equity base valuation of ₹ 34,000 crore*.

Under the proposed structure, TPREL will become the holding company of all our renewable businesses, including utility scale generation, manufacturing of cells and modules, EPC for renewable business, O&M services, rooftop solar, solar pumps and EV charging business. All future renewable businesses will be developed under this holding company.

*Subject to the adjustments based on FY23 EBITDA

Debt movement in FY22

In FY22, we have been able to maintain a sustainable debt profile, led by robust cash flows from operations and as an outcome of our strategy.


RoE target


Net Debt/underlying EBITDA target


Net Debt/Equity target

Key Ratios


  • Return on Average Net Worth (ROANW) before exceptional items % = PAT before exceptional items / Average Equity
  • Return on Average Net Capital Employed (ROACE) before exceptional items % = NOPAT / Average Capital employed Capital employed = Total Equity + Total Debt-cash & cash equivalents – Other Bank Balance – current investment – loan to related party + lease liability
    NOPAT = PAT before exceptional items + finance cost – other income – tax shield on net finance cost
  • Net Debt to Equity = Net Debt / Equity Net Debt = Total Debt – cash & cash equivalents – other bank balance – current investment – loan to related party
  • Net Debt to Reported EBITDA = Net Debt / Earning before Interest, Tax, Depreciation & Amortisation
  • Net Debt to Underlying EBITDA = Net Debt / Earning before Interest, Tax, Depreciation & Amortisation + Share of profit from JV & Associates
  • Interest Coverage Ratio = Earning before Interest and tax / Finance cost


At Tata Power, we are well placed to drive long-term shareholder returns by tapping into the large market potential and emerging opportunities. We are exponentially scaling up our Renewables business growth by aligning to the burgeoning RE environment, and pursuing strong opportunities in the transmission sector. We are transitioning to become a brand-led, and customer-focused player. We have laid out plans to expand our distribution footprint across India, leverage technology to expand rooftop solar and solar pumps, and create innovative, low carbon solutions for customers through ESCO, home automation and EV charging. This rightly positions us to become one of the top two energy companies in India.

Planned growth for green portfolio and B2C business

Capacity growth to 30 GW – more than 2/3rd portfolio ‘Clean & Green’
New age business possessed for significant growth
Multifold growth in customer-oriented business

Reallocation of capital employed

We are shifting capital employed from Mundra and thermal business to cleaner and consumer-driven businesses.

Performance in FY22

All our business clusters contributed strongly to our profitable growth despite continued impact of COVID-19 and buoyant input prices.

Note: The Management Discussion and Analysis section on page 135 provides more details on the financial performance of the Company.

Note: FCFBC=Free cash flow before capex
FCFAC= Free cash flow after capex
Free cash flow = Cash from operating activity + dividend income – dividend paid – distribution on unsecured perpetual securities – capex

Economic value added

Particulars FY20 FY21 FY22
Revenue generated1 29,510 33,679 43,496
Economic value distributed 29,110 33,322 43,336
Operating costs2 22,352 26,090 34,780
Employee wages and benefits 1,441 2,317 3,612
Payments to providers of financial capital3 4,674 4,429 4,214
Payments to government by country4 609 447 695
Community investments - CSR 34 39 35*
Economic value retained = Direct economic value generated less economic value distributed 400 357 160


  1. Revenue generated including other income and movement in regulatory deferral balance
  2. Operating cost including Cost of power purchased, Cost of fuel, Transmission charges, Raw material consumed, Purchase of finished goods, increase/ decrease in WIP, depreciation & other expenses excluding CSR
  3. Payment to providers of capital includes finance cost paid, dividend paid to shareholders & Distribution on Unsecured Perpetual Securities
  4. Payments to government by country include income tax paid (net of refund received)

*CSR in FY22 includes both spend and unspend amount