INTRODUCTION
Scenario of Power in India
Growth of economy calls for watching the rate of growth in
infrastructure facilities.Power sector is one of the major aspects
of this infrastructure building. Some prominent people like the
Ex Chairman of GE Jack Welch
have gone to the extent of saying,
youdont have a chance to stand in the 21
st
century without lots of powerWithoutthis you miss the next
revolution
.Moreover, the growth rate of demand for power in developing
countries is generallyhigher than that of GDP. In India, the
elasticity ratio was 3.06 in 1
st
plan, & peaked at5.11 during 3
rd
plan and came down to 1.65 in 80s. For 90s a ratio of around
1.5 was projected. Hence, in order to support a growth of GDP
of around 7%, the rate of growthof power supply of 10% is
required.If we look at current scenario, electricity consumption
in India has more than doubled inthe last decade, outpacing the
economic growth. If we analyze the various statistics of Indian
power sector, we will find that the generating capacity has gone
up tremendouslyfrom a meager 1712MW in 1950 to a whooping
147000MW today.The critical role played by the power industry
in the economic progress of a country hasto be emphasized. A
self sufficient power industry is vital for a nation to
achieveeconomic stability
Indian Power Industry
Before Independence
--The British controlled the Indian power industry firmly before
Independence. Then legaland policy framework was
contributing to private ownership, with not much regulationwith
regard to operational safety.
Post Independence
Immediately after Independence, the country was faced with
capacity restraint. Indiaadopted a socialist structure for
economic growth and all the major industries werecontrolled by
public sector enterprises. By 1970's, India had nationalized most
of itsenergy assets, due to its commitment to social goals. By the
late 1980's, the Indianeconomy felt the strain of the socialist
agenda followed since independence. Faced with aserious
deterioration in public finance and balance of payment crisis, the
Uniongovernment as part of its policy of economic liberalization
allowed greater investment by private sector in the power
industry.
THE electricity sector in India
is predominantly controlled by Government of India's public
sector undertakings (PSUs). Major PSUs involved in the
generation of electricityinclude National Thermal Power
Corporation (NTPC), National Hydroelectric Power Corporation
(NHPC) and Nuclear Power Corporation of India (NPCI).
Besides PSUs,several state-level corporations, such as
Maharashtra State Electricity Board (MSEB), arealso involved
in the generation and intra-state distribution of electricity. The
Power GridCorporation of India is responsible for the inter-state
transmission of electricity and the development of national grid.
India is world's 6th largest energy consumer, accounting for
3.4% of global energyconsumption. Due to India's economic
rise, the demand for energy has grown at An average of 3.6%
per annum over the past 30 years. In March 2009, the installed
power generation capacity of India stood at 147,000 MW while
the per capita power consumption stood at 612 kWh. The
country's annual power production increased fromabout 190
billion kWH in 1986 to more than 680 billion kWH in 2006. The
Indiangovernment has set an ambitious target to add
approximately 78,000 MW of installedgeneration capacity by
2012. The total demand for electricity in India is expected to
cross950,000 MW by 2030.Electricity losses in India during
transmission and distribution are extremely high andvary
between 30 to 45%. In 2004-05, electricity demand outstripped
supply by 7-11%.Due to shortage of electricity, power cuts are
common throughout India and this hasadversely effected the
country's economic growth.
Generation Grand Total Installed Capacity is 147,402.81 MW
Thermal Power
Current installed capacity of Thermal Power (as of
12/2008) is 93,392.64MWwhich is 63.3% of total installed
capacity.
Current installed base of Coal Based Thermal Power
is77,458.88 MWwhich comes to 53.3% of total installed
base.
Current installed base of Gas Based Thermal Power is
14,734.01 MW which is 10.5% of total installed base.
Current installed base of Oil Based Thermal Power is
1,199.75 MW which is 0.9% of total installed base.The state
of Maharashtra is the largest producer of thermal power in
the country.
HydroPower
India was one of the pioneering states in establishing
hydro-electric power plants, The power plant at Darjeeling
and Shimsa (Shivanasamudra) was established in 1898 and
1902respectively and is one of the first in Asia. The
installed capacity as of 2008 wasapproximately
36647.76.
The public sector has a predominant share of 97% in this
sector.
Nuclear Power
Currently, 17 nuclear power reactors produce4,120.00 MW
(2.9% of total installed base).
Renewable Power
Current installed base of Renewable energy is
13,242.41 MW which is 7.7% of total installed base with the
southern state of Tamil Nadu contributing nearly a third of it
(4379.64 MW)largely through wind power.
Power for ALL by 2012
The Government of India has an ambitious mission of POWER
FOR ALL BY 2012. Thismission would require that our
installed generation capacity should be at least 200,000 MW by
2012 from the present level of 144,564.97 MW. Power
requirement will double by 2020to 400,000MW.
Todays environment is a tough environment to survive, with the
new industries and the newsectors coming up so strongly and
financially sound. But to gain an extra edge over othersthey
ought to have an extra or special added advantage.
Our people are our most important asset
. Nearly every organization report contains a phrase like this &
for good reason. Today, the last great source of competitive
advantage ishuman capital.
Rationale
The purpose of the research was to criteria on which investment
of the company is raisedevery year and a favorable rate of return
is arrived at, increasing the net result of the companyas per their
budget.
ObjectiveThe study is aimed at:
To gain the overall idea about the organization.
To find out the financial performance of the organization
To find out the future requirement of finance in business
Scope of the Study
The study on the financial statements will help the interested
parties to know about the overall financial health of the
company. The ratios are helpful to forecast the future of
theorganization based on the past performance.
Company Profile
Background of NTPC
NTPC a global giant in power sector
NTPC Limited is the largest power generating company of
India. A public sector company, itwas incorporated in the year
1975 to accelerate power development in the country as awholly
owned company of the Government of India. At present,
Government of India holds89.5% of the total equity shares of
the company & the balance 10.5% is held by FIIs,Domestic
Banks, Public and others. Today, it has emerged as an
Integrated Power Majorwith a significant presence in the entire
value chain of power generation business.
Based on 1998 data, carried out by Data monitor UK, an
ISO 9001:2000 certifiedcompany, NTPC is the 6th largest
in terms of thermal power generation & the secondmost
efficient in terms of capacity utilization amongst the thermal
utilities in the world.
Within a span of 33 years, NTPC has emerged as a truly national
power company, with power generating facilities in all the major
regions of the country. Driven by its vision tolead, it has charted
out an ambitious growth plan of becoming a 75000 MW plus
company by2017.
Vision A world class integrated power major, powering
Indiasgrowth, with increasing global presence
."
Mission Develop and provide reliable power, related
products andservices at competitive prices, integrating
multiple energy sourceswith innovative and eco-friendly
technologies and contribute tosociety
.
Core Values BCOMIT
B Business Ethics
C Customer Focus(External & Internal)
O Organizational & Professional Pride
M Mutual Respect & Trust
I Innovation & Speed
T Total Quality for Excellence
Graphi cal Presentation of Market Capitalisation
Achievements
Recognizing its excellent performance and vast potential,
Government of the India hasidentified NTPC as one of the
jewels of Public Sector 'Navratnas'a potential global giant.
A) NTPC ranked317th in the 2009, Forbes Global 2000
ranking of the Worlds biggestcompanies.
B)NTPC has been rated as one of the top most Best Employer
of the country for the year 2003, 2004 & 2005 in a row.
C)It has also been rated as one of the Best Companies to
Work for in India byMercer HR Consulting- Business Today
Survey 2004, it has developed into a multi-locationand multi-
fuel company over the past three decades.
D) NTPC has been awarded No.1,Best Workplace in India
among large organizations for the year 2008, by the Great Places
to Work Institute, India Chapter in collaboration with
TheEconomic Times.
E)Leadership Award for CMD, NTPC in the 4th Global
Leadership Summitby AmityUniversity for Sectoral
Excellence in Power industry for his outstanding contribution to
thegrowth of Indian business & bringing glory to the country
through his pioneering leadership.
F)Ranked #1 independent power producer in Asia in the
THIRD ANNUAL PLATTSTOP 250 GLOBAL ENERGY
COMPANY AWARDS 2008for outstanding Globalfinancial &
Industrial performance at the award ceremony in Singapore. The
corporation has been simultaneously ranked #15, overall in Asia
amongst the energy companies.
G )NTPCs excellence in executing power projects & its
initiative in DecentralizedDistributed Power Generation has
been recognized and awarded at IEEMA Power Awards2008
NTPC Vindhyachal Stage-III (2x 500MW) has been conferred
the IPMA SILVER MEDAL for Project Excellence by
International Project Management.
Association, at the IPMA Congress, held in Rome, Italy, for
implementation of project inrecord time & achieving excellent
environmental, economic performance and giving outstanding
support to the local community.
Organization Structure of NTPC
SWOT ANALYSIS:-
STRENGTHS:-
1.GOOD CORPORATE IMAGE
2.Complete range of product for transmission & distribution.
3. Established brand name with executive oriented program
.4. Strong & wide networks of manpower across India
.5. Considered to be having technology & design ability.
Weakness: -
1. The procurement process in the companies is cumbersome
and subject to auditing
2. .2. Low exposure to the needs & dynamics of distribution
business.
3. 3. Role clarity on the requirement of being an equipment
supplier or a solution provider.As there are very few
supplier of equipment manufacturing plant.
Opportunities: -
1. Huge Investment leading to greater demand of goods and
services.
2. Demand leading to Industry operating at full & over capacity
.3. Better Price realization.
4. Early birds to learn faster and thus achieve repeat orders.
Policy to bid from ultra mega power plant
5. .5. Vertical integration for supply chain management of
coal by acquiring coal blogs.
Threats: -
1. Purchases preference may be extended to distribution sector.
2. Increase in no. of small contractors leading to price war.
3. Emergence of competitors in the market like Schneider,
Reliance, Tata etc.
4. Change in government policies for open trade or stock trading
or energy trading.5. Reduce the time lag.
Competitors
Torrent Power
Entered the power sector by acquiring two old state owned
electricity companiesand turned them into power utilities
comparable with the best.
BHEL
14 Manufacturing plants
279 Coal based Thermal Utility Sets of BHEL,
including 29 Sets of
500MW an d 157 Set s of 195-
250 MW i n s t al l e d i n t he Co unt r y ( As on31.03
.07)
During 2006-07, out of 279 Coal based Thermal Utility Sets of
BHEL in theCountry, 77 sets operated at PLF > 90% (6 sets
at 100%; 18 sets at 95 100% and 53 sets at 90-95%)
- 24 -
Industry players and profile
The power sector reveals that it can be largely
segregated into four different categories on the basis of type of
players in the industry. These include:
Central Government Corporations:
which consist of corporations likethe National Thermal Power
Corporation (NTPC), Nuclear Power
Corporation,National Hydro Electric Power Corporation (
NHPC), and some other smaller players.
State Government CorporationsWhich consist of the
variousstateel ect r i ci t y boar ds and ot her cor por at i ons
t hat have been pr omot ed by t herespective governments.
Poor management, transmission
and distribution (T&D)l o s s e s a n d p o o r r e c o v e r i e s o f
d u e s a r e s o me o f t h e f a c t o r s , wh i c h a r e responsi
ble for the plight of these corporations. Currently, the financial
health of many SEBs is precarious and their revenue-raising
capabilities are more or lessdependent on assured guarantees from the
respective governments.
Private Sector Licensees:
In the private sector, some companies hadbeen given licenses to
carry on generation and distribution activities. While someof these
companies are generation and distribution companies, others like
SuratElectricity are just distribution companies.
Independent Power Producers:
The Independent Power Producers( I PPs) ar e t he
compani es t hat have been gi ven a nod t o set up
gener at i oncapacities.Finally, a look at the regulatory structure
of the sector indicates that various Actsgovern the power sector.
