ENERGY SECTOR STRUCTURES, POLICIES AND
REGULATIONS
ASSIGNMENT 2
Company Analysis Report of
NATIONAL THERMAL POWER CORPORATION LIMITED
(NTPC Ltd.)
Submitted by: GROUP 10
Abhinav Garg (P101001)
Ambuj Lal (P101005)
Arijit Changmai (P101010)
Harsh Kanani (P101018)
Submitted to: Prof. Anupam Sircar Date: 02.11.2010
1
Company Overview
History of NTPC:
When India got independence the installed capacity was 1362 MW. Power was limited
to few urban centres. Rural areas and villages did not have accessibility to electricity. During
the Fifth Plan period (1974-79) Central Government felt it should supplement state
governments’ efforts to expand the power sector in order to ensure that the country achieves
the desired economic growth. The National Thermal Power Corporation (NTPC) was
formed on 7th November 1975 under Section 617 in the Companies Act. , 1956 as a public
sector unit. It was the first power sector company under the government along with
NEEPCO. Mr. Arup Roy Choudhury is the CMD of this firm. NTPC has an installed
capacity of around 32,200 MW.
Vision
“A world class integrated power major, powering India’s growth, with increasing
global presence.”
Mission
“Develop and provide reliable power, related products and services at competitive
prices, integrated multiple energy sources with innovative and eco-friendly technologies and
contribute to society”.
Core Values
Business Ethics
Customer Focus
Organizational & Professional Pride
Mutual Respect & Trust
Innovation & Speed
Total Quality for Excellence
Core Businesses
Presently, NTPC generates power from Coal and Gas. With an installed capacity of
32,194 MW, NTPC is the largest power generating major in the country. It has also
diversified into hydro power, coal mining, power equipment manufacturing, oil & gas
exploration, power trading & distribution. With an increasing presence in the power value
chain, NTPC is well on its way to becoming a major Integrated Power producer.
Business portfolio of the company consists of the following:
Power Project Construction
Generation of Electric Power
Coal Mining and Coal Washing
Oil Exploration
Distribution and Trading of Electricity through its fully-owned subsidiary company
2
Business Diversification
Hydro Power
NTPC entered hydro power business with the 800 MW Koldam hydro project in
Himachal Pradesh. Two more projects have also been taken up in Uttarakhand. A wholly
owned subsidiary, NTPC Hydro Ltd., is setting up hydro projects of capacities up to 250
MW.
Coal Mining
In order to reduce the import of coal and to make attain the goal of energy security,
NTPC has also jumped into coal mining business with an aim to meet about 20% of its coal
requirement from its captive mines by 2017. The Government of India has so far allotted 7
coal blocks to NTPC, including 2 blocks to be developed through joint venture route. Coal
Production is likely to start in 2009-10.
Power Trading
‘NTPC Vidyut Vyapar Nigam Ltd.' (NVVN), a wholly owned subsidiary was created for
trading power for maximum utilisation of its assets. In order to facilitate power trading in the
country, ‘National Power Exchange Ltd.’, a JV between NTPC, NHPC, PFC and TCS has
been formed for operating a Power Exchange.
Ash Business
NVVN is engaged in the business of Fly Ash export and sale to domestic customers. Joint
ventures with cement companies are being planned to set up cement grinding units in the
vicinity of NTPC stations.
Distribution of Capacity
NO. OF PLANTS CAPACITY (MW)
NTPC Owned
Coal 15 25,375
Gas/Liquid Fuel 7 3,955
Total 22 29,330
Owned By JVs
Coal & Gas 5 2,864
Total 27 32,194
Regional Spread of Generating Facilities
REGION COAL GAS TOTAL
Northern 8,015 2,312 10,327
3
Western 6,360 1,293 7,653
Southern 3,600 350 3,950
Eastern 7,400 - 7,400
JVs 924 1,940 2,864
Total 26,299 5,895 32,194
PAST PERFORMANCE:
Technical
OPERATIONAL PERFORMANCE OF COAL BASED NTPC
STATIONS
PLF
Generation(BU) Availability Factor (%)
(%)
2009-
218.84 90.81 91.76
10
2008-
206.94 91.14 92.47
09
2007-
200.86 92.24 92.12
08
2006-
188.67 89.43 90.09
07
2005-
170.88 87.52 89.91
06
2004-
159.11 87.51 91.20
05
2003-
149.16 84.40 88.79
04
2002-
140.86 83.57 88.70
03
2001-
133.20 81.11 89.09
02
2000-
130.10 81.80 88.54
01
1999-
118.70 80.39 90.06
00
1998-
109.50 76.60 89.36
99
Growth in Installed capacity has been 20.49 % for NTPC from 23935 MW to 28840 MW in
the period 2006 to 2010 while for Rest of India it has been by 30.10 % from 100325 MW to
130558 MW in the same period. Whereas growth in Generation of electricity has been by
28.07 % from 170.88 BUs to 218.84 Bus for NTPC compared to 23.79 % for Rest of India
from 446.50 BUs to 552.71 Bus.
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NTPCs share in Installed Capacity is 18 % of Total Installed Capacity in India, whereas its
Share of Electricity Generated is 28 % of Total Electricity Generated.
Financial
Revenues from Sales of Electricity alone have increased to Rs. 4,616,867 million in 2009-10
from Rs. 4,179,119 million in 2008-09. Revenue from other Operating activities has
increased to Rs. 15,392 million in 2009-10 from Rs. 13,254 million in 2008-09. Profit after
tax has increased from Rs. 872,820 million from Rs. 820,130 million in 2008-09. Debt to
Equity Ratio has been at 0.61 in 2009-10 compared to 0.60 in 2008-09. Return on Capital
Employed is slightly lower in 2009-10 at 13.97 % from 14.29 % in 2008-09.
Future Plans
A Long term Capacity addition Plan has been formulated stipulating an addition of 15,420
MW coal based and 1920 MW of hydro based Power Plants by 2017. An added capacity of
about 1000 MW by renewable sources by 2017 has also been planned. In line with the
mission of JNNSM 310 MW of power through Solar PVs & Solar Thermal by 2014 has also
been envisaged.
Human Resources Management at NTPC
NTPC has around 25000 employees across the country. The HR policy of NTPC has the
vision,” To enable our people to become a family of world class professionals.” The
generation ratio per employee turns out to be 8.48 MU / annum for each employee.
SWOT Analysis of NTPC
Strengths
NTPC has the largest market share in domestic power generation with a huge
customer portfolio across India. It has got the ‘NAVRATNA’ status and high brand
equity among the shareholders.
Different segments of thermal plants generation of multiple sizes and fuel types.
Ability to raise low cost debts and superior credit rating.
Turnaround ability of old plants. For example - Takeover plants of Talcher, Tanda
and Unchahar.
High engineering skills in project configurations.
In house training facility, R&D etc that assist in development of the sector.
Working on the Solar and Hydro projects.
Higher guaranteed returns and adequate financial profile.
Weaknesses
Poor financial health of customers.
Long procurement process leading to long lead times and process delay.
Improper and fragmented IT structures.
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Inadequate use of knowledge and technology that can assist in improving the
efficiency and effectiveness of business.
Lack of responsiveness in the hierarchy.
Operational risk, operational expenses and slow expansion.
Opportunities
Opportunities abroad to turn into a global utility.
Planning for an installed capacity of 75,000 MW by 2017.
Use of fuel mix by considering imported coal, domestic coal, gas, nuclear power etc.
by with a vision to mitigate fuel risk and maintain long run competitiveness.
Improve collections by trading, direct sales to bulk customers.
Executing increased number of power plants that classify for Mega Power projects
status thereby reducing the cost of the projects and power generated.
Development and commercial deployment of non-conventional energy sources. And
using Jawaharlal Nehru Mission plans to expand itself in the renewable sector.
Integrate into distribution business in India.
NTPC is strongly positioned to invest in accelerated growth, with cash and cash
equivalent of about Rs 14,500 crore as on March 31, 2010. The cash is being
“progressively deployed” in generating assets.
Renovation, modernization and infrastructure developments in India.
Expansion in International markets.
Threats
Shortage of skilled labourers.
Increasing raw material costs.
Legal and Political frameworks.
Stringent environmental norms in the future may add to the cost of generation.
Downward regularity and competitive pressure on tariffs.
Threats from private power producing companies like Reliance Power, Tata Power in
near future.
ACHIEVEMENTS
Ranked 317th in the ‘2009, Forbes Global 2000’ in World Biggest Countries.
Award of the Meritorious Performance for the Year 2008-09.
ICSI (Institute of Company Secretaries of India) National Award for Excellence in
Corporate Governance 2009.
NTPC has been awarded No.1, Best Workplace in India among large organisations for
the year 2008, by the Great Places to Work Institute, India Chapter in collaboration
with The Economic Times.
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References
34th NTPC Annual Report 2009-10
Websites
www.ntpc.co.in
www.profit.ndtv.com
www.info.shine.com
