Ntpc, Coal India Banking On Securitisation

The release of outstandings amounting to Rs 10,000 crore of National Thermal Power Corporation and Coal India Ltd through securitisation will be the key to these undertakings making fresh borrowings and meeting the huge target of Internal and Extra Budgetary Resources (IEBR) laid down in the 1998-99 budget.

Disclosing this government officials said securitisation would allow these public sector undertakings to make fresh borrowings to the tune of Rs 20,000 crore.

Although the 1998-99 plan outlay for the power sector has been hiked by 40 per cent in the budget, most of the increase is on account of the IEBR component, which has been increased by around 75 per cent or Rs 2,890 crore.

 

While there is a substantial increase in the IEBR component, the total budgetary support to the sector for 1998-99 has decreased by around 4.5 per cent or Rs 127 crore.

The total budgetary support for 1998-99 has been pegged at Rs 2,714 crore against the 1997-98 revised estimate of Rs 2,841.42 crore.

The substantial increase in the IEBR component indicates that the power public sector undertakings will meet funding requirements through internal resources and by issuing bonds (domestic as well as overseas) and debentures.

The budget has envisaged a 200 per cent hike over the 1997-98 revised estimates in the amount to be raised through domestic bonds and euro convertible bonds (ECBs) for 1998-99.

The government has budgeted around Rs 2,380 crore to be raised from bonds and debentures, and Rs 3,660 crore from ECBs.

As against this, the revised estimates for 1997-98 show that the government could realise only Rs 990 crore from bonds and debentures and Rs 2,106 crore through ECBs.

The IEBR component for key power public sector undertakings like NTPC, Power Grid Corporation and Power Finance Corporation has increased by around 95 per cent over the 1997-98 revised estimates.

The IEBR component of Power Finance Corporation has increased by 150 per cent, while that of National Thermal Power Corporation and PowerGrid is around 86 per cent.