NTPC lost 1.75% to Rs 115 at 11:54 IST on BSE, with the stock extending Monday's steep slide triggered by the Central Electricity Regulatory Commission in its latest order altering the incentive structure for state-owned power generation companies.
Meanwhile, the S&P BSE Sensex was up 38.63 points or 0.19% at 20,850.07.
On BSE, so far 10.73 lakh shares were traded in the counter as against average daily volume of 5.78 lakh shares in the past one quarter.
The stock hit a low of Rs 113.95 so far during the day, which is also a 52-week low for the counter. The stock hit a high of Rs 118.75 so far during the day. The stock had hit a 52-week high of Rs 162.80 on 3 May 2013.
The stock had underperformed the market over the past one month till 24 February 2014, sliding 11.06% compared with the Sensex's 1.52% fall. The scrip had also underperformed the market in past one quarter, declining 22.28% as against Sensex's 2.94% rise.
The large-cap company has equity capital of Rs 8245.46 crore. Face value per share is Rs 10.
More From This Section
Shares of NTPC have declined 12.97% in two trading sessions from a recent high of Rs 132.15 on 21 February 2014 after the Central Electricity Regulatory Commission in its latest order directed power utilities to charge production incentives based on actual offtake, instead of on their readiness to produce power at above 85% capacity utilization. The stock had tumbled 11.43% to settle at Rs 117.05 on Monday, 24 February 2014.
On Monday, 24 February 2014, CERC released orders reordering the incentive structure for the state-owned power generation companies such as NTPC. Accordingly, incentives will now be based on the metric of plant load factor (PLF) and not plant availability factor (PAF), as it was previously. PAF measures the generation capacity that is available, whereas PLF is based on the actual power that is generated at the plant. Effectively, CERC has linked future financial incentives with the purchase of power by distribution companies (discoms). Since distribution utilities are strapped for funds, often the PLF is lower than the PAFimplying that NTPC would be entitled to fewer financial incentives.
The order also linked the recovery of tax from the customers of power producers on the basis of actual payment of tax. In the earlier regime, if a firm managed to save on tax because of smart tax planning, it was allowed to retain such gains.
CERC also brought down the heat rate -- the heat energy required to produce one unit of power -- by 2%, altering the incentive structure drastically. This would reduce the volume of coal purchased per unit. Earlier, NTPC could burn more coal to generate one unit and this was allowed by the regulator to be claimed from the electricity procurers.
At the same time, the regulator has also reduced auxiliary consumption of power from 21.5% to 12.5%. Auxiliary consumption is energy consumed by the power generation company and is included as compensation in the tariff. Not only will the power producer have to invest in more efficient energy use technology, it will also reduce the carbon footprint and hence make it relatively less harmful for the environment.
NTPC's net profit rose 10.2% to Rs 2861.28 crore on 19% growth in net sales to Rs 18779.39 crore in Q3 December 2013 over Q3 December 2012.
NTPC, India's largest power company, has presence in the entire value chain of power generation business. The Government of India (GoI) holds 75% stake in NTPC (as per the shareholding pattern as on 31 December 2013).
Powered by Capital Market - Live News