Energising growth
Dear Shareholders,
I hope this letter finds you in good health and high spirits. It is my
pleasure to address you as we reflect on an exceptional year for KPI Green Energy Limited
and look forward to the promising future that lies ahead.
An Inflection Point
India is on the cusp of a transformative journey, aspiring to become
the world's third-largest economy in the coming years and a developed nation by 2047.
Achieving this vision necessitates a balanced energy transition — one that curbs
carbon emissions while ensuring an uninterrupted power supply. To realise this vision, and
its commitments at various international forums, the government is accelerating the shift
towards non-fossil fuel-based energy, setting ambitious targets for increasing renewable
energy capacity and clean energy. Industry estimates suggest that the Indian solar market
is expected to add an additional 130-140 GW over 2024-2028. More specifically, the
Government of Gujarat is actively working to harness the state's substantial renewable
energy potential of approximately 36 GW of solar capacity and 143 GW of wind capacity. The
state has set a target of achieving around 100 GW of renewable energy capacity by 2030.
This ambitious goal positions Gujarat as a leader in renewable energy development in
India, a stronghold for our Company, KPI Green Energy Limited. I can confidently say that
your Company will have a significant role in making this vision a reality.
Record-Breaking Performance
FY24 has been a banner year for KPI Green Energy Limited, underpinned
by growing capacities in both our Independent Power Producer (IPP) and Captive Power
Producer (CPP) business verticals. As a result, our Total Income for the year stood at
D1,030.8 crore, compared to D647.0 crore in the previous year, marking a growth of 59%
YOY. Consequently, EBITDA grew from D211.7 crore in FY23 to D343.7 crore in FY24,
registering a growth of 62% YOY. Ultimately, our Profit After Tax (PAT) for the year stood
at D161.7 crore, higher by 48% over the previous year.
In FY24, the Company's total installed capacity reached 445+ MW,
comprising more than 158 MW from Independent Power Producers (IPP) and over 287 MW from
Captive Power Producers (CPP). This represents a 42% increase compared to FY23, where the
total installed capacity was 313+ MW, with IPP contributing more than 137 MW and CPP
providing over 176 MW.
Taking into account the Company's robust performance, the Board of
Directors recommended a final dividend of 2%, i.e., D0.20 per equity share of the face
value of D5 each for FY24, subject to the approval of shareholders at the ensuing Annual
General Meeting. This follows two interim dividends announced by the Company, each of
D0.25 per equity share during FY24.
Bolstered Capital Structure
One of the biggest achievements of FY24 was raising D300 crore first
ever through a Qualified Institutional Placement (QIP) by issuing shares to marquee
investors under Qualified Institutional Buyers (QIBs) category. This marks a major
milestone in our journey, bolstering our capital structure further and allowing us to
pursue a larger number of projects in both IPP and CPP segments. As a result of this
equity fundraise and healthy profitability in FY24, the Debt-to-Equity ratio has improved
significantly from approximately 2 times in FY23 to around 1 time in FY24. The key
objective of this issue is to secure capital for GUVNL Khavda Project partial financing of
our 240 MWDC in the Kutch region of Gujarat. Furthermore, the Company has completed the
financial closure with the State Bank of India (SBI) for the balance debt portion at a
lucrative rate of interest.
Strategically Advancing Towards Our Goal
We have built several strategic priorities to march toward our larger
goal as an organisation. Our primary focus is on pursuing portfolio growth and building a
strong position in solar and hybrid projects, with a specific emphasis on large
utility-scale projects. Simultaneously, we are working towards capturing the MSME and
smaller power projects business strategically through our subsidiaries. We aim to maintain
a balanced mix of IPP and CPP projects to achieve strong, steady cash flows with tax
benefits. Additionally, we continue to grow our hybrid portfolio projects and leverage
group expertise in wind projects, recognizing the significant push from the government and
pull from the industry on hybrid projects due to their attractive value proposition and
reliability. Strategic acquisition of land within the vicinity of power evacuation (PE)
substations remains a key focus area. Lastly, we are pursuing geographical diversification
beyond the state of Gujarat while maintaining our strong commitment to the state.
Value Creation for All Stakeholders
Our guiding principle remains the creation of value for all our
stakeholders, including clients, employees, shareholders, and our broader ecosystem. While
KP Group has consistently delivered results for its shareholders, we are equally committed
to enabling our employees to participate in our value creation journey. In line with this
commitment, initially, we approved a pool of 500,000 equity shares under the ‘KPI
Green Energy Limited - Employee Stock Option Plan 2023? scheme during our last AGM.
Following a bonus issue of 1:2, the ESOP pool was expanded to 750,000 (Seven Lakh Fifty
Thousand) shares. From the aforementioned pool, I am pleased to say that this year we have
granted 601,399 stock options to eligible employees of the Company, its subsidiaries, and
associated companies. This initiative underscores our belief in the importance of aligning
our employees' interests with the long-term success of the Company.
Outlook
As we look ahead, we are excited about the strong pipeline, evacuation
capacity and large land bank, with approximately 1.23 GW of business pipeline, including
IPP, CPP, hybrid projects, and the GUVNL & MAHAGENCO tenders. Our bolstered capital
structure and ability to pursue capacity expansion, supported by industry tailwinds,
create all the right elements for continued growth and value creation.
I would like to extend my heartfelt gratitude to all our stakeholders
— clients, employees, shareholders, ecosystem partners, government, and regulatory
authorities. Your unwavering support and trust have been instrumental in our success, and
we look forward to achieving greater heights together.
Thank you for your continued faith in KPI Green Energy Limited.
Warm Regards,
Dr. Faruk G. Patel
Chairman and Managing Director
KPI Green Energy Limited