An electricity pole stands with a junction box and cables attached to it in the village of Fateh Nagla, Uttar Pradesh, India. (Photographer: Prashanth Vishwanathan/Bloomberg)

NTPC May Look To Buy Stressed Power Assets

The country’s largest power producer NTPC Ltd. may step in to buy stressed assets in the sector, the company’s Director of Finance Kulamani Biswal told BloombergQuint in an interview on Wednesday. While there is no firm plan in place yet, NTPC will identify ‘good-quality’ assets with a capacity of 500 megawatts or more, Biswal said.

NTPC’s comments come at a time when banks are struggling to resolve stressed assets in sectors like power and steel. While steel assets may attract investors, analysts have been skeptical about the interest that power assets would draw. Total loans to the power sector, including those to distribution and transmission firms, stand at Rs 5.24 lakh crore, shows the RBI’s sectoral lending data.

The government has sought NTPC’s help in the past to deal with stressed assets in the power sector. In July, BloombergQuint reported, citing banking sources, that the government is mulling a restructuring plan for stressed power projects. This plan involved NTPC managing stressed power plants which are pooled together in a special purpose vehicle. Bankers were working on this plan together with power ministry officials. Discussions, however, slowed after Piyush Goyal was shifted from the Power Ministry to the Railway Ministry as part of a cabinet reshuffle.

When asked whether NTPC was still in discussions to manage stressed assets, Biswal said this was one option. He added that a second option was to acquire stressed power assets after putting out an expression of interest. Raising funds for any such potential acquisition will not be a problem, Biswal said.