The power ministry has approved NTPC Ltd’s proposed exit from International Coal Ventures Pvt. Ltd (ICVL), in a move that could hurt India’s efforts to acquire overseas coal assets. ICVL was promoted by five state-owned firms two years ago to buy coal mines overseas. While Steel Authority of India Ltd (SAIL) and Coal India Ltdown 28% each of ICVL, NTPC, Rashtriya Ispat Nigam Ltd and NMDC Ltd own 14% each. The 14% share of India’s largest power generation utility in the consortium, which hasn’t managed to close a single purchase, is expected be split proportionately among the remaining partners. The exit will end the acrimony among the partners that surfaced last year which forced the government to allow NTPC and Coal India exit the consortium if they wished to.
ICVL was floated on the coal ministry’s initiative and has an initial equity capital of Rs.3,500 crore and authorized capital of Rs.10,000 crore. Coal India continues to be part of the consortium. According to NTPC the reason for the split was that, while the power producer needs thermal coal to fuel its power projects back home, ICVL’s other stakeholders are largely interested in metallurgical coal reserves to feed their steel mills. And the thermal coal offered to it does not meet the utility’s technical requirements. Still, the breakup will pose a challenge to the efforts of the government to create a sovereign fund like arrangement and create a unified acquisition resource pool in the form of ICVL. NTPC’s decision comes at a time when the country is facing its worst coal shortage. India faces a shortage of both metallurgical and thermal coal.
| Company Name | CMP |
|---|---|
| NTPC | 365.70 |
| Tata Power | 413.55 |
| Power Grid Corp | 337.00 |
| Adani Power | 460.75 |
| Torrent Power | 1517.70 |
| View more.. | |
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