WELCOMES
DISTINGUISHED INVITEES & GUESTS
WELCOMES
DISTINGUISHED INVITEES & GUESTS
April 2006April 2006
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Corporate vision
Corporate vision:
“A world class integrated power major, powering
India’s growth, with increasing global presence”
Core Values:
BCOMIT
B-Business Ethics
C-Customer Focus
O-Organizational & Professional pride
M-Mutual Respect and Trust
I-Innovation & Speed
T-Total quality for Excellence
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Company overview
A national generation company, supplying electricity to all major states (28 states)
Installed capacity of 24,249MW, projects spread geographically across the country
Diversified generation portfolio
High capacity utilization of 87.5% for fiscal 2006
Experienced professional management team with proven track record
One of the foremost power generation companies, with comprehensive in-house capabilities in building and operating power projects
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1975
Total shareholder’s funds of USD10.213 billion as on 31st December 2005.
Total Asset base of USD 15.409 Billion as on 31st December 2005.
NTPC was set up in 1975 with 100% ownership by the Government of India. In the last 30 years, NTPC has grown into the largest power utility in India.
In 1997, Government of India granted NTPC status of “Navratna’ being one of the nine jewels of India, enhancing the powers to the Board of Directors.
NTPC became a listed company with majority Government ownership of 89.5%.
NTPC becomes third Largest by Market Capitalisation of listed companies
Key milestones to market dominance
Stakeholder
Value Creation
Disciplined and focused investments aimed at
maximizing returns; adherence to best practices
Strong Management team, Professional and dedicated
organization
Sound business concept & investment philosophy, High standards of
Corporate Governance
1997 2004
Today, NTPC is the largest power utility in India, accounting for about 20% of India’s
installed capacity
Exchange rate used: 1 USD = 45.07 INR
2005
The company changed its name to NTPC Limited to change its business portfolio and transform itself from a thermal power utility to an integrated power utility.
5
Corporate structure of NTPC group
Subsidiaries
NTPC Vidyut Vyapar Nigam Limited
100%
Pipavav Power Development Co.
Limited
100%
NTPC Electric Supply Co. Limited
100%
NTPC Hydro Limited
100%
Joint ventures
NTPC-SAIL Power Company Pvt. Limited
50%
NTPC Alstom Power Services Pvt. Limited
50%
Bhilai Electric Supply Co. Pvt. Limited
50%
Utility Powertech Limited
50%
NTPC Tamilnadu Energy Co. Limited
50%
PTC India Limited
8%
Ratnagiri Gas & Power Private Ltd
28.33%
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Key competitive strengths
Dominant market share in India
High off take security
Proximity to fuel sources
High operating and cost efficiency
Strong management team with solid track record
Strong Relation with Government of India
Strong credit ratings
Str
ate
gic
imp
ort
anc
e t
o In
dia
Low Operational Risk Profile
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Market leader and dominant power provider in India
Market leadership – The next largest power utility owns 5.9% of market share in terms of capacity and 7.2% of share in terms of units generated
More than one-fourth of India’s generation with one-fifth capacity
A national level generation company, supplying electricity across the country.
Possesses comprehensive in-house capabilities in building and operating power plants
NTPC has contributed to over 27% of Generating Capacity addition in the country during last 23 years
NTPC's share in total capacity and total generation in India
Generation (All India 617.293 Bus)
NTPC 170.88 BUs(27.7%)
Total capacity (All India 124,237MW)
NTPC 24,249 MW
(19.52%)
Tentative figures as of 31st March 2006
35,781
99,988
24,249
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
1982 Mar-06
(MW)
Others NTPC
Installed and generation capacityNTPC’s contribution to total installed
capacity
0
5
10
15
20
25
30
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2006
020406080
100120140160180
Installed Capacity Generation
000' MW bn units
Capacity as on date - 24,249Own - 22,929Taken-over - 1,320
NTPC Generation CAGR 25% Vs All India 6.70%
NTPC Capacity CAGR 20% Vs All India 5.30%
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NTPC’s nationwide footprint
Owns multi-fuel stations
At multiple locations
NTPC is India’s premier national generating company
In addition, NTPC also manages Badarpur Thermal Power Station (705 MW ) of GOI in Delhi
Source: Company Data
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High off take security [source]
Commercially attractive source of power Average selling price is US 3.4 cents approx. per KWh in fiscal 2005 compared to:
Malaysia Average: US 6.3 cents per KWH Thailand Average: US 7.2 cents per KWH Singapore Average: US 9.4 cents per KWH Philippines Average: US 10.5 cents per KWH
Supply decisions based on commercial principles Allocation of power to customers with ability to pay flexibility to reduce sale to defaulting Customers
Energy sale assured through long-term Power Purchase Agreements (“PPAs”) Off take secure with entire output being contracted Strong payment security mechanism in place 25 years life span for coal supply agreement and 15 years for gas agreements
Realized 100% amounts due from SEBs Since fiscal 2004 New collection mechanism has minimized delays in customer payments One-time settlement of overdue receivables, which were converted into bonds bearing tax-free
interest of 8.5%, and were issued by the respective state government-owners of the defaulted SEUs
Long-term contracts with clients
Source: S&P Report
Exchange rate used: 1 USD = 45.07 INR
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Proximity to fuel sources
Fuel constitutes nearly 70% of total operating costs
Optimal cost and timely availability of fuel is a must
Therefore, proximity to fuel sources is critical
Lower fuel transportation costs
9 of the 13 coal based stations are “pit head” plants
Most gas fired plants located along major gas pipelines
NTPC has fuel linkages tied-up prior to commencement of construction
Furthermore, NTPC has secured fuel sources via allotment of 8 mining blocks
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Leads to high utilisation rates
Unchahar Plant PLF
18.0
92.2
0
20
40
60
80
100
Taken over in 1992 2005
%
Capacity UtilizationCapacity Utilization
Talcher Plant PLF
18.7
79.3
0
20
40
60
80
100
Taken over in 1995 2005
%
Tanda Plant PLF
14.9
86.07
0
20
40
60
80
100
Taken over in 2000 2005
%
Turn Around Ability Turn Around Ability
64.8
81.8
66.4
81.1
68.7
83.6
68.8
84.4
69.9
87.5
70
87.5
0
10
20
30
40
50
60
70
80
90
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06
Rest of India NTPC
Data for coal based power plants
Source: Ministry of Power Annual Reports, CEA Executive Summary, Planning Commission Annual Report
Operational availability at 91.2% in fiscal ’05Recorded highest ever PLF of 87.5%
Operational availability at 91.2% in fiscal ’05Recorded highest ever PLF of 87.5%
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Operating efficiency
Low cost operations…
4.14.5 4.6
5.1 5.35.6
6.1 6.36.6
7.17.4
0
1
2
3
4
5
6
7
8
94-9
5
95-9
6
96-9
7
97-9
8
98-9
9
99-0
0
00-0
1
01-0
2
02-0
3
03-0
4
04-0
5
MUGeneration per employee
3.4
7.8
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
NTPC Industry Average
Supply price (in US cents per kWh.)
Exchange rate used: 1 USD = 45.07 INR
Source: S&P Report
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Project Implementation … a proven track record
39 3936
59
50
39
0
10
20
30
40
50
60
70
Singrauli (1988) Vindhyachal(1999)
Simhadri (2002)
Talcher - II (2003)
Simhadri (2002) Ramagundam-III (2004)
(No. of Months)
Reducing project completion time
Track record in project implementation and completion
An integrated system for planning, scheduling, monitoring, control of projects and capital costs
Strong in-house engineering strength
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Low Operational Risk Profile
Minimal External Minimal External Risk due to “Pass Risk due to “Pass
Thru” TariffThru” Tariff
Tariff, as determined by CERC, enable complete pass through of changes in fuel cost and foreign exchange to the customer
With the announcement of Tariff Policy in Jan 06 the uncertainty of determinants of Tariff is eliminated
Reduced Tariff Reduced Tariff Collection RiskCollection Risk
Billings secured by Letter of Credit
In case of default, NTPC has access to Central Government’s fund allocation to State
Diversified Diversified Generation Generation
PortfolioPortfolio
Low site risk – generating stations spread across 20 locations in India
Minimal risk of coal unavailability – favourable position of most of its coal based stations at mine mouths
Low Off-take RiskLow Off-take Risk
Long term power purchase agreements with SEB
Energy deficient market and NTPC’s cost competitiveness minimize offtake risk
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Strong Relationship with Government of India
Navratna status has given autonomy in making investment decisions
Facilitated tripartite agreements for one time settlement of outstanding dues and future payment security
Supported new initiatives:
Coal mining
Participation in LNG value chain
Entry into power trading, distribution and hydro power generation
Assigned NTPC the consultant role to modernize and improve several plants across the country
Partnering in GOI Rajiv Gandhi Grameen Vidyutikaran Yojana
Chose NTPC to disseminate technologies to other players in the sector
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Partners in Progress - NTPC’s Contribution to National Reform
NTPC has been identified as expert partner under the ‘Partnership in Excellence’ program taken up by Ministry of Power in conjunction with Central Electricity Authority. This program aims in improving the performance of power stations with lower PLF.
NTPC has been assigned a role of consultant for undertaking Renovation and Modernization of old plants of State Utilities.
NTPC has been appointed as advisor cum consultant for Project Monitoring and quality Assurance and inspection of assigned Accelerated Power Development & Reforms Program projects.
NTPC also provides training to engineers of state electricity boards through its Power Management Institute.
Assigned Rural Electrification work under Rajiv Gandhi Grameen Vidyutikaran Yojana Scheme
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Strong credit ratings
Current credit rating
Standard & Poor’s: BB+ (Stable outlook)
Fitch: BB+ (Stable outlook)
“Standard and Poor’s believes the government of India is likely to offer moderate support to NTPC in the event of a financial crisis, given its important role in a critical economic service.”
“NTPC is largely insulated against a significant loss in revenues in the event of a breakdown in one or two of the generation units, given its generation portfolio of 20 stations spread throughout the country. Furthermore, most of its generating plants have favorable mine-mouth locations, resulting in lower fuel transportation costs, and a lower risk of interruption in fuel supply.”
December 2005
S&P
“The rating reflects NTPC’s strong operating record, its cost competitiveness relative to its domestic peers, and its strong financial profile based on low debt levels and stable cash flows”
“The rating also reflects NTPC’s flagship status as a leading CPSU and its market prominence as the largest generator in India”
January 2005
Fitch
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Snap Shot of growth strategies
Exploit new business
opportunitiesTechnology initiatives
Further enhance fuel security
Maintain sector leadership position
through rapid capacity expansion
Other initiativesPrudent financial
strategies
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Financial Summary
USD MILLIONS
Exchange rate used: 1 USD = 45.07 INR
(1) Revenue = Sales + Other income excluding Provisions written back;
(2) EBITDA = Revenue- Operating Expenses
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4,2164,175
4,994
2002-03 2003-04 2004-05
Revenues & Income
CAGR = 8.8%
Operating revenues
800
1,1671,288
2002-03 2003-04 2004-05
Net income
(Million USD)
(Million USD)
CAGR = 20.4%
Exchange rate used: 1 USD = 45.07 INR
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Financial discipline
Capital structure
Diversified sources of funds
Prudent financial profile - Debt to Net Worth of 0.41:1
Dividend policy
Highest ever dividend for fiscal 2005 @ 24%
Interim dividend for fiscal 2006 @ 20%.
NTPC will continue to balance dividend pay-out and growth to take advantage of country’s deficit power position
Liquidity
Access to large credit lines, both from financial institutions, Banks, Multilateral and Bilateral agencies
Net cash flow of USD 1.12 bln generated from operating activities in FY 2004-05
Leveraging borrowing with a debt-to-equity ratio of 70:30
Exchange rate used: USD = 45.07 INR
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In a nutshell
Dominant market share in India
High off take security
Proximity to fuel sources
High operating and cost efficiency
Strong management team with solid track record
Strong Financial Position
Strong credit ratings
Go
ve
rnm
en
t s
up
po
rt
Strong Relation with Government of India
Industry Dynamics
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India is a very attractive energy market
Demand has consistently outstripped supply in the last few years
Industry dynamics
Global drivers
Energy is an industry essentially driven by GDP and disposable income growth
India’s GDP outlook remains strong with demand for energy expected to rise significantly in the future
Positive supply-demand balance
(Demand expected to outstrip supply)
High potential for growth India - A supply deficit power market
Source: UN Development Program, Human Development Indicators, 2005
Per capita energy consumption in kwh (CY 2002)
569
1,287
1,484
2,183
6,614
11,299
13,456
2,465
India
Egypt
China
Brazil
UK
Australia
USA
World avg.
All figures are in bn units, except where stated otherwiseSource: Annual Report, Ministry of Power, 2002-2003, CEA Executive Summary
7.3%
507
523
546
559
591
467483
498519
548
440
460
480
500
520
540
560
580
600
2001 2002 2003 2004 2005
7.8%
7.5%
8.8%
Availability % Energy DeficitRequirement
7.1%
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Industry dynamics – New initiatives
National Electricity National Electricity PolicyPolicy
Providing policy guidance to Electricity Regulatory Commissions and to Central Electricity Authority (CEA) for preparation of National Electricity Plan
Tariff PolicyTariff Policy Provides guidance to regulatory commission for tariff setting
Competitive Bidding Competitive Bidding ProcessProcess
Guidelines for procurement of electricity through competitive bidding
Appellate TribunalAppellate Tribunal Has been set up to expedite the process of settlement of appeals against the
rulings of regulatory commissions
Rajiv Gandhi Rajiv Gandhi Grameen Grameen
Vidhyutikaran YojanaVidhyutikaran Yojana
For providing electricity to all rural households in five years
Revival of Dabhol Revival of Dabhol Power ProjectPower Project
A joint venture company namely ‘Ratnagiri Gas and Power Private Limited’ with shareholding of NTPC, GAIL, Indian Financial Institutions and Maharashtra State Electricity Board has taken over the assets of the Dabhol Power Project
Launch of Ultra-Mega Launch of Ultra-Mega Power ProjectsPower Projects
Government is facilitating the setting up of ultra-mega power projects with capacity of 4000 MW each
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CONCLUSION
•GOVT HAS PUT IN PLACE LEGAL FRAMEWORK FOR ENABLING POLICIES
•INDIAN ECONOMY IS ON GROWTH PATH
•DEMAND FOR ELECTRICITY IS IMMINENT
•REFORMS STARTED YIELDING RESULTS
•MARKET IS ENORMOUS
•INDIA IS PREFERED DESTINATION FOR INVESTMENT
DISCLAIMER
The information contained in this document relating to projections and estimates are forward looking The information contained in this document relating to projections and estimates are forward looking statements based on existing laws & Regulations. Actual result may vary materially from those statements based on existing laws & Regulations. Actual result may vary materially from those expressed or implied, depending upon economic conditions, government policies and other expressed or implied, depending upon economic conditions, government policies and other incidental factors. Any opinion expressed is given in good faith but is subject to change without incidental factors. Any opinion expressed is given in good faith but is subject to change without notice. No liability is accepted whatsoever for any direct or consequential loss arising from the use notice. No liability is accepted whatsoever for any direct or consequential loss arising from the use of this documents. The Financial figures as reported in Indian rupees have been translated into US of this documents. The Financial figures as reported in Indian rupees have been translated into US Dollars using Reserve Bank of India Reference Rate for US Dollar solely for the purpose of Dollars using Reserve Bank of India Reference Rate for US Dollar solely for the purpose of convenience of the readers. No representation is made that the Indian Rupee amounts have been, convenience of the readers. No representation is made that the Indian Rupee amounts have been, could have been or could be converted into United States Dollars at such a rate or any other rate.could have been or could be converted into United States Dollars at such a rate or any other rate.
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