In what could provide a major fillip to the valuations of power generator NTPC Ltd a month before its public issue hits the market, the government is set to restore allocation of three of its coal blocks on Tuesday. The union cabinet had recently given its go-ahead for the restoration of the blocks.
“The three coal blocks would be re-allocated tomorrow,” power minister Jyotiraditya Scindia said briefing the media after a ministerial panel’s meeting. A coal ministry official confirmed the development. “We had sought law ministry’s final advice on the matter. That will come tomorrow. A notification for re-allocation will be issued subsequently,” he said.
The government plans to divest 9.5 per cent stake in NTPC to raise upto Rs 12,000 crore. The finance ministry is planning to bring the offer for sale in the first fortnight of February. The move is part of the plan to raise 40,000 crore this fiscal through PSU disinvestment. The government has been able to raise only Rs 6,900 crore so far this fiscal.
The blocks together house 830 million tonne (MT) of coal reserves and can produce upto 13 MTPA. The restoration would boost the company’s plans to more than double generation capacity to 75,000 Megawatt by ramping up in-house coal production to 47 million tonne per annum, around a fourth of its coal requirement over the next five years.
Another official confirmed the development by adding that the work already done by the company in developing the blocks, coupled with ongoing coal shortage, led the government to reconsider its earlier decision to cancel the allotments. “NTPC has already acquired land in two of the three blocks. Besides, it has appointed consultants and selected the Mine
Development Operators (MDOs),” he said.
The three blocks – Chatti Bariatu, Chatti Bariatu (South) and Kerandari-are meant to supply fuel to two power plants of 1,320 Mw capacity each-Barh in Bihar and Tanda stage II in Uttar Pradesh. Both the projects, when commissioned, would require over 10 million tonne (MT) of coal annually.
NTPC consumes around 120 MT coal annually to fire its 39,000 Mw power generation capacity. The company’s share price at the Bombay Stock Exchange (BSE) today closed at Rs 161.7, down 1.4% as compared to previous close.
