NTPC is eyeing Japanese loans and has plans for a local Indian currency bond offering, as it looks to tie up funds to fuel its expansion plans, a company official told FE. However, as of now, the company is looking to raise only $400-$500 million in overseas loans in the current financial year, compared with its foreign borrowings of $750 million in the previous fiscal as the cost of foreign loans has increased recently. If market conditions improve, the company may exceed this target, an official said.
?We see that Japanese loans are cheaper than dollar ones at present, and if the current market conditions continue, we could see borrowings from Japan increase,? said GK Sadhu, executive director, finance. The official did not specify exactly how much the company plans to raise through yen borrowings in the current fiscal, saying it was contingent on market conditions.
The company currently has $3 billion in foreign debt and with its sovereign rating, it doesn?t face difficulty in picking up overseas borrowings. Of the total overseas borrowings, 79% is dollar denominated, yen contributes around 16% and the euro stands at 5%. The company has a total borrowings of around R58,000 crore. During fiscal 2012-2013, total borrowings increased 16% as it raised debt totaling around R11,700 crore.
?Banks are very keen to lend to us, given our financial strength,? NTPC chairman Arup Roychoudhury said.
NTPC has plans to raise R1,750 crore through a INR tax-free bond later this fiscal. Local tax-free bond offering by PSUs have been met with mixed responses from investors, but NTPC is confident in generating interest in its offering. The company?s capex might slightly exceed its R22,000-crore target for the current fiscal. It is now expected to come be at R22,296 crore, an NTPC official said.
NTPC, which has an installed capacity of 41,184 MW, has a long-term target of achieving 1.28 lakh MW of power generating capacity, with 28% from non-fossil fuel sources. Out of the 14,020 MW that NTPC is expected to add during the 12th Plan (2012-17), it has added 4,170 MW. For FY14, the company plans to add 1,875 MW to its installed capacity, including renewable energy projects.
Roychoudhury reiterated that the company is evaluating opportunities to buy distressed power plants, saying that they have been approached by some parties to look at these assets. He did not divulge whether bankers had directly approached them or not, but said the company was conducting due diligence on these assets. He said the company is looking at assets which have fuel linkages and all other approvals that are ready, but may not have power purchase agreements tied up.