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NTPC plans Rs 26,548 crore MTN issue

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NTPC, largest power generation company in India, is planning to raise $4 billion (Rs 26,548 crore) from overseas markets in medium-term notes, its biggest overseas issue and about four times its maiden $1 billion MTN programme launched about a decade back.

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The fundraising, to be executed in tranches and filed with the Singapore Stock Exchange, is to fund power plants, start coal mining projects, and renovate old power stations.

The last time NTPC went for an overseas MTN issue was in 2012 when it raised $500 million as part of its previous $2 billion fundraising programme.

Country’s biggest power house, which accounts for 18% of installed capacity and 26% of power generated, is currently doubling its capacity, adding 50,004 mw to its 45,548 mw capacity as on September end.

“As of the date of this offering, NTPC was engaged in construction activities for projects representing 23,004 mw, including 4,495 mw undertaken by its joint venture companies, which are in different stages of progress. The issuer is also pursuing a number of additional projects, representing a further increase of more than 27,000 mw of capacity, which are in various stages,” NTPC said in its filing, adding that another 10,000 mw would be built as renewable-energy projects.

Barclays, Citigroup and Deutsche Bank are acting as arrangers to the issue, the filing said.

Of the capex needed to double its power generating capacity, close to 30% would be funded by internal accruals or through the issue of equity shares while the balance 70% would come from debt financing, NTPC said.
Apart from the power projects, coal mining would be a major operation requiring funds.

“NTPC has planned to source coal for some of the power projects under construction from the mines allotted to it and is working towards starting coal production from these mines commensurate with the start of power generation from the linked end-use power projects,” it said.

Most of its existing projects, or about 87.5% of directly-owned installed generating capacity, are coal-fired, with just 10.20% being gas or naphtha-based.

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