Despite government initiatives, NTPC declines 15 per cent in September

The third-largest power generation and distribution company of India, NTPC Ltd, has seen a nearly 15 per cent fall in its share on BSE, since last one month. The price has fallen despite supportive cues from the government and additional capacity installation in the first quarter of the current fiscal year.

Among the recent steps taken for the industry, the Ministry of Power signed MoUs with the company regarding a few important annual targets. As per the stated targets, for FY21 under excellent categorisation, the company will have to take up the task of 340 BU of electricity generation, 15 MMT of coal production, Rs 21,000 crore of Capex, and Rs 98,000 crore of revenue from operations.

The government had initiated a three-month moratorium under which, it allowed discoms to pay dues to the power generation companies. However, due to the impact of the ongoing pandemic and the resultant lockdown, the company is likely to face recovery issues.

Further, on operational efficiency, the risk of coal availability and uncertainty price trend is considered as major challenges for NTPC to maintain its cost competitiveness. These are considered to be the major concerns for the investors.

On Monday, the stock of NTPC further declined to Rs 83.95, down by 1 per cent on BSE.