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In an attempt to secure coal supplies NTPC Ltd may spend an estimated $1 billion (Rs4,870 crore) to acquire a South African coal mining firm with the exploration licence for 1 billion tonnes of coal reserves. On acquisition of the firm, NTPC will also get the licence to mine the coal. With NTPC having huge cash reserves, it is in an advantageous position for a deal of this size, according to sources. Going by recent coal deals, if the reserves are not proven, the valuation of a mine is around 10-20 cents per tonne. For proven resources, it is 50-60 cents per tonne. Operational mines come with a much higher price tag of around $2-3 per tonne.
While NTPC’s projects are facing an acute coal shortage, it has not succeeded in any of its overseas plans for sourcing either coal or gas. At the same time, the company has a sizeable war chest, with cash reserves of Rs44,393 crore. Coal is critical for NTPC, as at least 80% of its installed capacity of 30,644MW is coal-based. With about 67% of the total power generation currently based on coal, the power sector is the largest consumer, absorbing nearly 78% of
NTPC could be competing with leading Chinese government-run coal miners such as China Shenhua Energy Co. Ltd and Yanzhou Coal Mining Co. Ltd, which are actively engaged in acquiring mining concessions overseas.
Coal mining costs are expected to rise, due to demand pressures on equipment and human resources in particular, but it will still have value for investors who choose to mine rather than purchase at prevailing market rates.
| Company Name | CMP |
|---|---|
| NTPC | 365.40 |
| Tata Power | 436.30 |
| Power Grid Corp | 313.35 |
| Adani Power | 635.75 |
| Torrent Power | 1382.10 |
| View more.. | |
MoneyWorks4Me rating and ranking of funds for SIP is available to subscribers only. Moneyworks4Me is not a rating and ranking agency, however it is required that users have a way of selecting funds and building a Portfolio. The method used by it are described below to enable users to understand the logic behind the rating and ranking Subscriber will find more details on this in the various content made available from time to time. In case you need more please write to besafe@moneyworks4Me.com
MoneyWorks4Me rates and ranks mutual funds based on the following data-driven system:
Funds ranking in screeners: Performance Consistency and Quality are two parameters used for ranking funds for SIP. The ranking as follows GG, GO, GR, OG, OO, OR, RG, RO and RR.
With the same color-coded funds, the one with the higher Average 3-year rolling returns (over 5 to 10 years), the number that appears in the Performance tag, ranks higher.
Here is the summary:
The third tag Upside Potential is not relevant for SIP. It is relevant for lumpsum investments in Mutual Funds.
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