India state-run utilities to form power exchange

Three major state-run power industry companies have agreed to establish a national power exchange in India.

NTPC Ltd., the former National Thermal Power Corp.; NHPC Ltd., the former National Hydroelectric Power Corp.; and Power Finance Corp., a state-run financial institution for the energy sector, signed a memorandum of understanding August 8 to launch a joint venture company, an NTPC statement said.

Also joining the venture is top software services exporter Tata Consultancy Services.

The statement said the power exchange would provide a neutral and transparent electronic platform for trading of power.

India, which suffers chronic power shortages, already has the Indian Energy Exchange, founded by Financial Technologies, which opened officially in mid-July. The National Commodities and Derivatives Exchange Ltd. plans another power bourse with the National Stock Exchange, which is expected to go live later this year.

NHPC revives plan for initial public offering

NHPC also has revived plans for an initial public offering (IPO) of shares, filing papers with the market regulator, while two bankers said it hoped to raise US$600 million with the issue.

NHPC previously initiated an IPO proposal, but delayed the offer because it did not have enough independent directors on board, according to investment bankers involved in the deal. (HNN 4/6/07)

“We have submitted the draft red herring prospectus with the market regulator,” NHPC Chairman S.K. Garg said.

The company said it is to sell 1.68 billion shares, which would include a fresh issue of 1.12 billion shares. The bankers said the firm planned to sell a 13.64 percent stake in October or November.

The NHPC board approved the proposed IPO August 5, the company said, adding the funds would be used for its expansion. SBI Capital Markets, Enam Securities Pvt Ltd., and Kotak Mahindra Capital are advisers to the issue.

NHPC has 11 completed hydro projects of 3,755 MW, 13 under construction of 5,712 MW, 12 in development or investigation totaling 16,400 MW, and other joint venture and turnkey projects.

NHPC’s share sale could revive a stalled privatization drive, a move many expect the government to pursue after it parted ways with its communist allies and won a confidence vote in parliament.

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