NTPC to raise Rs 26,548 crore MTN issue from overseas market

MAHARATNA PSU NTPC is planning to raise $4 billion (Rs 26,548 crore) from overseas markets in medium-term notes (MTN), its biggest overseas issue and about four times its maiden $1 billion MTN programme launched about a decade back.
The fundraising aims at funding power plants, start coal mining projects, and renovate old power stations.
The last time NTPC, the largest power generation company in India, went for an overseas MTN issue was in 2012. At that time the PSU raised $500 million as part of its previous...
$2 billion fundraising programme.
Country's biggest power house, which accounts for 18 percent of installed capacity and 26 percent of power generated, is currently doubling its capacity, adding 50,004 mw to its 45,548 mw capacity as on September end.
"As of the date of this offering, NTPC was engaged in construction activities for projects representing 23,004 mw, including 4,495 mw undertaken by its joint venture companies, which are in different stages of progress. The issuer is also pursuing a number of additional projects, representing a further increase of more than 27,000 mw of capacity, which are in various stages," NTPC said in its filing, adding that another 10,000 mw would be built as renewable-energy projects.
Barclays, Citigroup and Deutsche Bank are acting as arrangers to the issue to be executed in tranches and filed with the Singapore Stock Exchange.
Of the capex needed to double its power generating capacity, close to 30 percent would be funded by internal accruals or through the issue of equity shares while the balance 70 percent would come from debt financing, the filing added.
Apart from the power projects, coal mining would be a major operation requiring funds.
"NTPC has planned to source coal for some of the power projects under construction from the mines allotted to it and is working towards starting coal production from these mines commensurate with the start of power generation from the linked end-use power projects," it said.
Most of its existing projects, or about 87.5 percent of directly-owned installed generating capacity, are coal-fired, with just 10.20 percent being gas or naphtha-based.
Currently, working without a regular CMD, NTPC is India’s largest energy conglomerate with roots planted way back in 1975 to accelerate power development in India.
Arup Roy Chowdhury, who served as the chairman of NTPC for the last five years, retired on August 31 after the NDA government denied him an extension. A K Jha, director, technical, at NTPC, has taken over additional charge of the post of chairman and managing director. In a bid to woo global talents, Union Power Ministry recently posted an ad in The Economist in its search for global talents to head NTPC. It was an attempt under Prime Minister Narendra Modi’s initiative to bolster their performance and spur economic growth. The basic annual pay for the post is mentioned as less than $24,000.
The posting on The Economist’s website by the power ministry is another indication of Modi’s desire to inject private-sector know-how into sprawling government.
NTPC was ranked 431st in the ‘2015, Forbes Global 2000’ ranking of the World’s biggest companies.
A search committee constituted for the job, led by power secretary Pradeep Kumar Pujari, is currently entertaining applications only from candidates holding engineering degrees, a leading financial daily reported. This renders most IAS officers ineligible for the post.