NTPC jumps on plan to reduce coal supply cost at Kudgi plant

NTPC jumped 6.97% to Rs 101.25 after the company said it will bring down cost of coal at Kudgi plant in Karnataka with a newly constructed bridge.

In a press release dated 19 August 2020, NTPC said it would be able to reduce the transportation cost of coal to fuel to its NTPC Kudgi Super thermal power station in Karnataka, to around Rs 200-500 per metric tonnes (MT) thereby bringing down the cost of electricity generation and also reducing the transit time by 8-15 hours.

"The newly constructed 670 meter longest bridge in South Western railway is beneficial to NTPC Kudgi as it helps in reducing the cost of generation of electricity and it also helps the railways by handling more material with the available infrastructure. Besides, with the availability of double lines, travel time from Sholapur in Maharashtra to Gadag in Karnataka will be reduced, saving time for the passengers", it added.

NTPC has provided assistance on doubling of the lines on the existing tracks from Hotgi, Maharashtra to Kudgi, Karnataka (134 Kms) and provided support in the construction of two bridges on the river Bhima.

The company is currently awaiting for the final approval from the South Western Railway and will start the operations as soon as it gets clearance.

In the past one month, the scrip has added 15.89% as against 2.26% rise in the benchmark S&P BSE Sensex.

In the derivatives market, NTPC 27 August 2020 futures were trading at 101, at a discount of 0.25 points compared with the spot at 101.25.

The NTPC option chain for 27 August 2020 expiry showed maximum Call OI of 42.52 lakh contracts at the 100 strike price. Maximum Put OI of 27.75 lakh contracts was seen at 90 strike price.

NTPC is a maharatna company operating in the power generation business. The principal business activity of the firm is electric power generation through coal based thermal power plants. It also engages in the business of generation of electricity from hydro and renewable energy sources.

As of 30 June 2020, the Government of India held 51.02% in the PSU company.

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