NATIONAL THERMAL POWER CORPORATION LIMITED
National Thermal Power Corporation Ltd. (NTPC) is an India-based company engaged in the generation and sale of bulk power to state electricity boards/state utilities. The Company is also engaged in providing consultancy, project management and supervision, oil and gas exploration, coal mining, hydropower, power equipment manufacturing, power trading & distribution. NTPC has installed capacity of 29,894 MW. It has 15 coal-based power stations (22,394 MW), 7 gas based power stations (5,456 MW) and 4 power stations in Joint Ventures (2,044 MW). The company has power generating facilities in all major regions of the country. It plans to be a 75,000 MW company by 2017.
INVESTMENT RATIONALE
§ Co. plans to put 3,000 MW capacities on commercial generation during the year. Out of this, 1,000 MW capacity has already been put on commercial generation at Sipat (500 MW) and Kahalgaon (500 MW). The remaining 2,000 MW to be put under commercial operation will include 2 units of 250 MW each at Bhilai, one unit of 500 MW at Sipat and 2 units of 500 MW each at Kahalgaon.
§ Capacity utilization (PLF) of coal based power plants reached 92.24 per cent in 2007-08 compared to the national PLF of 78.61 per cent.
§ NTPC has been on a rapid expansion spree over the past few years, during which, it invested around Rs 23,000 crore in fixed assets. Since it also generated cash of Rs 24,000 crore from operations, it did not have to raise extra cash from other sources. The company plans to invest nearly Rs 13,600 crore during FY09, over and above an investment of Rs 8,200 crore in FY08. Currently, a capacity of 16,180 mw is under construction, including 3,750 mw in JV companies, which will be completed by FY12. Of this, 2,800 mw will be completed in FY09, which can add about Rs 700 crore to the bottomline.
§ The company is developing three hydel power plants, totalling 2,000 mw, as a diversification move.
§ An important element of its operations is that it is selling power at Rs 1.84 per unit, as per the rules laid down by the power regulator, which is much lower than the spot price. As the market is freed up over a period of time, the company stands to gain the most.
§ While its expansions may require high leveraging, NTPC looks well-placed with a reasonable debt-equity ratio of 0.52. This contrasts with a debt-equity ratio of 2.3, which is allowed for a generation company. This leaves enough room for the company to raise debt, if required.
§ NTPC is planning to use inland waterways to transport imported coal from seaports to its power stations in an effort to limit the transportation costs, for which it has joined hands with Inland Waterways Authority of India.
§ Co. is participating in the entire value chain of power development to contribute to the Government’s commitment of providing power for all by 2012.
§ NTPC has formed a JV with BHEL, incorporated as ‘NTPC BHEL Power Projects Private Limited’ for manufacturing balance-of-plant (BoP) equipments and main-plant equipments. This JV will also operate in the EPC space.
§ Company has another JV incorporated as “BF NTPC Energy Systems Limited” with Bharat Forge. This will also help in meeting requirement of balance of plant equipment.
§ NTPC has formed a JV with Bihar State Electricity Board under the name Nabinagar Power Generating Company on Sept.’08 for setting-up of a coal based power project having capacity of 1980 MW (3 X 660 MW) and operation & maintenance thereof at Nabinagar in district Aurangabad of State of Bihar.
