Investors

Chairman's Statement

(44th Annual General Meeting)

Dear Shareholders,

It is my great pleasure to welcome you all to the 44th Annual General Meeting of your company.

We are in the midst of a global public health crisis which is threatening the entire humanity. The spread of COVID-19 virus has presented extraordinary challenges to the global economy and human livelihood.

Our Government has taken various steps for containing the spread of COVID-19. Your company has also taken proactive measures to prioritize the health of its employees, their families and all those who are working at our different locations.

Electricity is an essential part of our lives. Its importance has further increased during this period as it is critical in providing emergency services and facilitating lifesaving equipment. This has clearly brought additional responsibility on your company. Everyone has been rightfully applauding the front-line Corona warriors including medical professionals and essential service providers.

Your company has taken all the measures to keep the generators on bar to meet the grid demand while complying with the required protocols as specified by the Governments and local administration. As a responsible organization, your company has extended support to different agencies in every possible manner.

Before presenting the performance highlights, I would like to convey thanks to each one of you for your continued support and investment in NTPC. I wish all of you stay safe and healthy.

While the challenges in business environment remained, you company had shown outstanding performance in FY20 as well and achieved several milestones in operations, new capacity addition and on the renewable energy front.

  • Your company has set a new benchmark by adding 5290 MW of commercial capacity, which is the highest ever achieved in any year since inception.
  • Acquired Government of India’s stake in NEEPCO and THDC which has added 3294 MW capacity. Out of this, 2625 MW is hydro and 142 MW renewables. These acquisition helps your company in balancing its portfolio.
  • Even during the COVID period, 984 MW of commercial capacity has been added, which demonstrates NTPC’s inherent resilience. With all these, your company has become a 62,910 MW company as of today.
  • On the generation front, the company’s group generation stood at over 290 BU.
  • In FY20, your Company’s coal PLF has consistently maintained a positive difference of over 12% as compared to the National PLF. Four stations of NTPC figured in top ten stations list of the country in terms of PLF.
  • Despite decrease in demand due to COVID in FY21, your company’s generation recorded a positive growth. I am happy to inform you all that in Q2 FY21, your company has recorded double-digit growth.
  • Your company recorded the highest ever single day generation of 977.07 MU on July 28, 2020.
  • Your company recorded a profit of ₹10,112.81 Crore. The profit before tax registered an increase of 14.15%.
  • The total income has crossed ₹1,00,000 Crore and the company declared dividend of ₹3117 Crore to shareholders. This is the 27th consecutive year that the company has paid dividend.
  • Khargone Plant in Madhya Pradesh is selected as one of the finalists in mega sized category of prestigious international IPMA Project Excellence Award-2020.
  • Extracted 11.15 MMT of coal from captive mines, registering an increase of 52.5% over previous year. Coal production has started at one more mine, Talaipalli. With this, three mines are under operation and mining operations at two more mines are also in advanced stage.

With the addition of ~20 GW capacities under construction coupled with increased thrust on renewables, the company’s generation share in National generation portfolio is set to increase further.

Consistent efforts are being made to increase the generation share and maximum availability of generators. Your company’s 1st and the oldest Unit, Singrauli Unit#1 which started commercial operation in February 1982 has registered a PLF of 101.96% in Q1FY21, which is the highest in the country. The feat achieved by the 38 years old Unit strongly reflects the Operation and Maintenance practices being adopted by your company and the competency of people operating the Units.

Your company is putting continuous thrust on enhancing the capability of employees. Several initiatives are being taken for skill upgradation and increasing managerial capability. Steps are also being taken for maintaining strong leadership pipeline.

Your company is reviewing its business strategy continuously and several initiatives are being taken for ensuring long term sustainability.

Your company has changed its focus and is pursuing renewable capacity addition aggressively. We have taken the decision not to acquire any further land for green field thermal projects in near future and the focus will be on reducing the carbon foot print.

  • 2.5 GW of renewable projects are under construction as part of NTPC’s own capacity and 1.6 GW under developer mode.
  • Your company is also implementing 237 MW of floating solar projects on water bodies.
  • In order to get access to large tracts of land for RE projects, discussions are in progress with State Governments of Gujarat, Rajasthan, Madhya Pradesh, Maharashtra and Andhra Pradesh for allocation of land parcels for setting up of renewable projects. These would be developed under Ultra Mega Renewable Energy Power Parks scheme of the Government of India.
  • By 2032, we are aiming to add 32 GW of renewables, both by organic and inorganic route and targeting to become the largest renewable energy company in India.

To optimize cost, bring synergy in operations and to add renewables with a focused approach, your company has taken decision for formation of a separate subsidiary company for carrying out renewable energy business.

Your company is diligently following ESG principles and has implemented strong ethics, fair corporate governance, effective risk management, extensive stakeholder engagement and stringent safety measures at all of its establishments.

Your company has taken a major leap and adopted integrated reporting for sustainability performance disclosure along with financial disclosure. Aligned with its sustainability priorities, your company has formed its board level Sustainability Committee to oversee ESG and climate change related issues.

Your company is enhancing resource efficiency through reduced coal consumption by adopting co-firing with biomass and optimization of water consumption. Your company is also committed to circular economy. Significant thrust is being put on increasing ash utilization effectively on a sustained basis. Further, your company is also focusing on developing Waste-to-Energy plants.

An example of highly effective corporate governance practices at your company is the fact that your company has been adjudged as the winner of the prestigious CII-ITC Sustainability Award 2019, a great feat reflecting utmost transparency and integrity and following sustainability practices diligently. Further your company saw ‘Nil’ audit observations from CAG in FY20 as well.

Coal mining has been another important area, your company is actively pursuing to reduce its dependence on coal suppliers, optimize the cost of generation, ensuring maximum dispatch of power and thereby increasing generation share.

To further speedup the mining activity, a separate mining subsidiary, NTPC Mining Limited has been incorporated.

Your company is actively pursuing new business areas and exploring various options for diversification of its business operations to maintain the growth trajectory.

Your company is actively pursuing green hydrogen portfolio which aligns well with NTPC’s large renewable growth plans. Your company is working with various agencies who are pioneers in hydrogen technology and aims to have a significant share in hydrogen economy.

Your company is focusing on carbon free mobility solutions including EV charging, EV transportation / Hydrogen FCEV transportation. Your company is also actively looking at power distribution, Waste-to-Energy, Consultancy Business and increasing global footprint.

With acquisition and participation in the bidding process for stressed assets, we have opened a new avenue for growth.

In its endeavor to become a 130 GW company by 2032, your company has envisaged an aggressive capital expenditure plan which is also aligned with the National Infrastructure Pipeline of the Government of India. An action plan has been prepared by your company for capital expenditure of over ₹1 lakh crore for the period of 2019-2024.

Your company has adopted a dynamic debt strategy for raising long term debt at optimal cost for meeting its capital requirement. Your company is also putting emphasis on a proactive refinancing strategy to leverage the market conditions for availing low cost debt. The success of this strategy can be gauged by the decreasing weighted average cost of borrowings which stood at 6.81% for FY20 and is expected to reduce further.

Many power sector reforms are being introduced by the Government for bringing efficiency and discipline in the sector. Along with this, new market mechanism designs have been under discussion to promote competition thereby providing affordable power to the consumers.

Real Time Market (RTM) has been introduced w.e.f June 01, 2020. This scheme will provide the generators an opportunity to dispatch more power and at the same time generate additional revenue.

Under Atmanirbhar Bharat Abhiyan, the government has facilitated Discoms with loans for clearing their dues of the generators. This is a mutually beneficial scheme as it will reduce the interest liability of the Discoms and at the same time increase the liquidity for the generators.

These are expected to bring positive changes and help in long-term sustainability of the power sector.

Your company is taking various digital initiatives to simplify processes, bring efficiency, speed and transparency. Your company is also considering AI/ML tools for power plant operation to increase efficiency, safety, cost optimization and reduce downtime.

Your company is actively considering increasing geo-strategic reach. Offices were opened in Myanmar and Kenya. I am pleased to inform you that your company has received Project Management Consultancy contacts for setting up of solar projects at Togo and Mali through International Solar Alliance (ISA). Discussions are also underway with various countries for setting up solar capacity up to 10 GW through ISA platform.

Your company is currently focusing on Middle East and African countries for business opportunities.

Since inception, your company has maintained leadership in all aspects of power generation business. Needless to mention that being competitive has become part of your company’s culture. Steps are being taken for bringing cultural changes to respond quickly to changes in the power sector.

Your company is continuously working on options for maximizing profitability. Various optimization and technological measures are being taken for resource utilization and keeping expenses under control.

On behalf of the NTPC family, I assure you that your company will continue to put tireless efforts for maximizing profitability and bring value to its shareholders. I once again assure you that your company has a great future ahead.

I take this opportunity to place on record my sincere thanks and gratitude to the Government of India, particularly Ministry of Power, Ministry of Coal, Ministry of Railways, Ministry of Environment Forest and Climate Change, Ministry of New and Renewable Energy, DPE, DIPAM, CERC, CEA, CAG, State Governments, our valued Customers, Auditors, Vendors, other authorities and agencies that provide unstinted support.

I convey my appreciation to my colleagues on the Board and all employees for their invaluable contribution in strengthening the Company. I express my sincere thanks to the investors and shareholders for their sustained support to the Company.

Thank you,


(Gurdeep Singh)
Chairman & Managing Director