The company also allowed discoms to defer payment of fixed charges of Rs 2,064 crore in three equal monthly installments, without interest, after the end of the lock-down period.
Following the announcement by NTPC of the discount on discom, IDFC Securities analysts suggested that the earnings per share would be affected by Rs 0.92 / share in FY21.
The decision of State-run power generation NTPC to offer a rebate of Rs 1,363 crore to power distribution companies (discom) is seen to reduce its profit of FY21 by Rs 920 crore. The company also allowed discoms to defer payment of fixed charges of Rs 2,064 crore in three equal monthly installments, without interest, after the end of the lock-down period.
Following the announcement by NTPC of the discount on discom, IDFC Securities analysts suggested that the earnings per share would be affected by Rs 0.92 / share in FY21. The deferral of capacity charges is projected to raise the interest cost of NTPC FY21 by Rs 25 crore, as per ICICI Securities. Power plants are contractually entitled to receive fixed costs for the recovery of capital costs, even if the purchasers do not purchase electricity from the units.
Following the coronavirus outbreak, the Union Power Ministry urged CPSU utilities, including NTPC and Power Grid Corporation of India Ltd (PGCIL), to consider providing a one-time rebate of 20-25% on fixed charges to state-owned discoms.
PGCIL has given a one-time combined rebate of Rs 1,075 crore to discom, which is seen to increased its income for FY21 by Rs 730 crore. The consolidated net profit of NTPC was Rs 12,634 crore at the end of FY19, with an annual increase of 20.3 per cent. PGCIL ‘s consolidated net profit for the same fiscal year amounted to Rs 10,034 crore, up 22.3 per cent per year.
NTPC ‘s annual fixed charges amount to ‘37,000 crore, which includes interest on long-term and working capital loans, depreciation, operating and maintenance charges and return on equity ( RoE).
PGCIL, the country’s central transmission utility, also earns 15.5 per cent of RoE ‘s regulated power to make its transmission infrastructure available. It also has a clear pipeline for the commissioning and commercialization of projects, a good track record for execution and controlled returns.
