National Thermal Power Corporations foray for projects beyond the shores of the country should come as no surprise. With avenues getting limited due to the cash-strapped position of electricity boards, red tapism and competition from global utility companies, NTPC was bound to look for business opportunities in other countries. Such a business strategy would be crucial for a company which is planning to come out with an initial public offer and would go a long way in proving its true worth in the global utility market. After being set up in the mid-70s to promote inter-state regional super thermal power projects, the company has now developed critical mass which includes an in-house pool of talent capable of setting up and operating a variety of thermal projects as well as the financing experience that is crucial to compete with global majors. One must remember that even at the height of the IPP boom, global majors which were operating in India did not depend on their expats, but on people from companies such as NTPC and Bharat Heavy Electrical Limited for their Indian operations. With the low cost advantage that Indian companies normally have, the prospects for NTPC seem to be very bright in the international market.
News reports suggest that NTPC has tied up with domestic equipment major BHEL for a project in Oman. If such strategic alliances, between operators and equipment suppliers are pursued and encouraged by the government, it would also offer business opportunities in the form of vendor credit to Indian banks. Through such alliances, not only can the companies grow and gain expertise even if the domestic market itself remains sluggish but it would also give a fillip to the investment banking sector. If the Chinese can enter the Indian utility market, breaking the stronghold of both BHEL and some European equipment companies, Indian companies too should be able to bid and execute projects in other countries. However, there is one area in which the Indian companies are probably lagging behind and that happens to be in technology. Not that Indian equipment is substandard or out-dated, but there were no opportunities in the domestic market that allowed them to venture into new territory. This can be overcome through greater investments in R&D and by going global.