Post on 11-Jan-2016
Corporate Presentation
May 2009
2
Disclaimer
This presentation and the accompanying slides (the “Presentation”), which have been prepared by PTC India Limited (the “Company”), have been prepared solely
for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and shall not form the basis or be
relied on in connection with any contract or binding commitment whatsoever. This presentation is confidential and may not be copied or disseminated, in whole or in
part, and in any manner. The information contained in this presentation is subject to change without notice and past performance is not indicative of future results.
This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no
representation or warranty or undertaking, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness,
correctness and reasonableness of the contents of this Presentation. This presentation has not been approved and will not be reviewed or approved by any
statutory or regulatory authority in India or by any Stock Exchange in India and may not comply with all the disclosure requirements prescribed thereof. This
Presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any
omission from, this Presentation is expressly excluded.
Certain matters discussed in this Presentation may contain statements regarding the Company’s market opportunity and business prospects that are individually
and collectively forward-looking statements. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown
risks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but are not limited to: the performance of the Indian economy
and of the economies of various international markets, the performance of the power industry in India and world-wide, competition, the company’s ability to
successfully implement its strategy, the Company’s future levels of growth and expansion, technological implementation, changes and advancements, changes in
revenue, income or cash flows, the Company’s market preferences and its exposure to market risks, as well as other risks. The Company’s actual results, levels of
activity, performance or achievements could differ materially and adversely from results expressed in or implied by this Presentation. The Company assumes no
obligation to update any forward-looking information contained in this Presentation. Any forward-looking statements, projections and industry data made by third
parties included in this Presentation are not adopted by the Company and the Company is not responsible for such third party statements and projections.
This presentation does not constitute an offer or invitation to purchase or subscribe for any securities in any jurisdiction, including the United States. No part of its
should form the basis of or be relied upon in connection with any investment decision or any contract or commitment to purchase or subscribe for any securities.
None of our securities may be offered or sold in the United States, without registration under the U.S. Securities Act of 1933, as amended, or pursuant to an
exemption from registration therefrom.
The distribution of this document in certain jurisdictions may be restricted by law and persons into whose possession this presentation comes should inform
themselves about and observe any such restrictions.
All financial data for the 9 month period ended Dec. 31, 2008 are audited and the 3 month period of the last quarter and fiscal year ended March 31,2009 are
unaudited.
3
Agenda
PTC India - OverviewPTC India - Overview
Unique Business ModelUnique Business Model
Key Financials and Strong Management TeamKey Financials and Strong Management Team
HighlightsHighlights
4
Overview
Genesis of PTC
Set up in 1999 at the initiative of Government of India with the
following objectives:
Promoting power trading to optimally utilize the existing
resources;
Facilitate development of power projects under private
sector and development of power market for market
based investment in the Indian Power Sector; and
Promote exchange of power with neighboring countries.
Promoted by industry participants with a credible track record
and significant sectoral experience
NTPC - India’s largest thermal power generator
POWERGRID - India’s largest central transmission utility
PFC – Development financial institution dedicated to the
power sector
NHPC - Large hydroelectric power generator in India
Played a pivotal role in creation of power market in India
Sale of MUs increased from 1,617 MUs* in FY 2002 to
9,889 MUs in FY 2008
Sale of 11,643# MUs for period ended Dec 31, 2008
PTC Today
PTC’s business includes Short term, Medium term, Long term
(including cross border) power trading and trading of power
through India Energy Exchange (“IEX”)
PTC has now expanded its business operations and moved
towards an Integrated Energy player
PTC India Financial Services
PTC Energy Limited
Direct investments in other identified projects
Fuel Intermediation
Power Tolling Arrangements
* MUs: Million Units; # Includes trading volumes from cross border and IEX
Total MUs traded
1,617
4,178
8,88710,119 9,549 9,889
11,64311,029
-
3,000
6,000
9,000
12,000
FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 9 monthsFY 09**
** includes trades made on IEX
Source: Company
5
Shareholding Pattern
Source: NSE; As on December 31, 2008
Insurance Companies
13.7%
Others (including individuals)
19.2%
Promoters21.1%
Mutual Funds13.6%
FIIs26.9%
FI & Banks5.5%
6
Proven Track Record of Value Creation
One of the leading players in Indian Power Trading,
diversifying into related energy businesses
FY 2000FY 2002
FY 2004
FY 2009
Power trading business began operations
1,617 MUs traded
Market Cap.: INR 15,772 mn (US$ 311 mn**)
Market leader in India in trading of power
Market share of ~ 46.5%#
11,643## MUs traded
Set up in 1999 at the initiative of Government of India
Listed on BSE and NSE since 2004
Market Cap.: INR 2,400 mn (US$ 47 mn*)
*Based on the IPO price of INR 16 per share, ** Based on BSE closing price of INR 69.35 as on March 31, 2009; 1 USD = 50.64 INR
# For the 9 months ended December 31, 2008; based on data available on websites of CERC, REA and trading licensees. Includes cross border power trades, does not include power trades on power exchanges, including IEX, and is limited to trading licensees only.
## For the 9 months ended December 31, 2008; Includes cross border and IEX power trades; Source: Company
7
Uniquely Placed as an Integrated Energy Player
Experienced Team
Promoters with a credible track record and significant power sector experience
Diversified Board with well known Independent Directors
Professional and well qualified Management
Network of relationships
Strong relationships with key industry participants GoI, Utilities and IPPs
Provides an edge over our competitors in various businesses segments
Relationships with marquee investors like Goldman Sachs and Macquarie
Presence in Energy Value Chain
Power Trading Direct Investments in Power
projects Fuel Intermediation Power Tolling Arrangements Advisory Services
Strong Performance
Robust financial performance till date
Zero bad debts Revenues CAGR of 24.7% (last 3
years) Revenues for 9months FY09 were
at Rs 5,428 Cr, up ~37.4% from FY08 on account of new clients and trading on IEX
Leading Market Position
Market maker Market leader in India in trading
of power Market-share of ~46.5%* Cross border trading with Bhutan
and Nepal Co-promoter of India’s First
Electricity trading platform IEX
* For the 9 months ended December 31, 2008 and based on data available on websites of CERC, REA and trading licensees. Includes cross border power trades, does not include power trades on power exchanges including IEX and is limited to trading licensees only.
8
Indian Power Sector Scenario
Source: Planning Commission, CEA, Ministry of Power* Provisional Figure** For 2007
Historically characterized by Huge Energy Shortages Low Per Capita Consumption of Electricity**
Shortfall in Capacity Addition has aggravated power gap Key Highlights
Growth in demand for power outstripping the growth in generation and
capacity addition
High Aggregate Technical and Commercial losses of about 32%* in
FY2007
Inter regional installed transmission capacity increased from 5,050 MW at
the end of IXth Plan to 13,700 MW at the end of Xth Plan
With facilitation of inter-regional transmission, trading activities are set to
gain momentum and location constraint on generation capacity is
expected to subdue
2,9
80
1,8
02
1,6
95
64
6
61
2
56
3
2,5
96
8,3
65
0
2,500
5,000
7,500
10,000
OECDCountries
MiddleEast
China LatinAmerica
Asia India Africa WorldAverage
(kw
h/ye
ar)
591632
691
548 579625
666739
559546498 519
8.8%
9.9%
7.1% 7.3%
8.4%
9.6%
0
200
400
600
800
1,000
1,200
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
(billion units)
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Energy Requirement (BUs) Energy Availability (BUs) Shortage (%)
31
40 41
1619 21
0
15
30
45
1992-97 1997-02 2002-07
(GW)
Target Installed
Large investment required to achieve Govt. target of per capita consumption of 1,000 kwh by 2012
9
Power Sector: Huge Capacities Planned
Plans to add 165,200 MW generation capacity in next 10 years (XIth and XIIth Plan) with transmission and distribution sector growing in parallel to support additional capacities
Source: Planning Commission, CEA, Ministry of Power
XIth Plan
132,329 MW
198,089 ckm
2008 2009 2010 2011 2012
211,029 MW
293,372 ckm
Generation: Capacity addition of 78,700 MW planned during XIth Plan period
36,874 MW (46.9%) in central sector;
26,783 MW (34.0%) in state sector; and
15,043 MW (19.1%) in private sector
Transmission: to add 95,283 ckm transmission lines
AC Substation capacity to increase by 176,561 MVA
Inter regional transmission capacity to increase by 23,450 MW
Distribution: to focus on village and household electrification
Continuation of ARDRP with revised terms focused on reduction of AT&C losses
251,439 MVA
428,000 MVA
10
Agenda
PTC India - OverviewPTC India - Overview
Unique Business ModelUnique Business Model
Key Financials and Strong Management TeamKey Financials and Strong Management Team
HighlightsHighlights
11
Growth Strategy - Presence in Energy Value Chain
Power Trading
Short Term trading
Medium Term trading
Cross Border trading
Trading on Power exchange
Long Term trading
Fuel Intermediation
Long Term Arrangement to
secure fuel
Power tolling arrangements - to
encourage additional generating
capacities to come up
Opportunities being explored
with various strategic partners
for acquiring coal assets
Subsidiaries, Associates and Investments
PTC India Financial Services
PTC Energy
Athena Energy Ventures
Teesta Urja
Krishna Godavari Power Utilities
Wind Power
Barak Power Private Limited
Capture Greater Share Of Energy Value Chain By Diversifying Into Related Energy Businesses
Advisory Services
12
Early movers in Short Term Power Trading
Market leader in power trading
Traded volumes* increased from 1,617 MUs in FY
2002 to 9,889 MUs in FY2008
Sale of 11,643# MUs for period ended Dec 31, 08
Transactions cover most of the State Electricity
Utilities in the country
Business focuses on identifying parties with a surplus of
power and parties with a deficit of power at particular
times and for specific durations
Various products created to provide flexibility to its clients
Round the clock power
Evening or Morning peak/ Afternoon or Night off-
peak power
Specific time blocks for 6 to 18 hours
Weekend or Holiday power
Day ahead power, also through IEX
Energy Banking
NORTHERN
WESTERN
SOUTHERN
EASTERN
NORTH EASTERN
Traded volumes for 9 months ended Dec 31, 2008;
Purchase and Supply figures include cross border trades
Source: Company
Purchase: 418 MUs
Supply: 5030 MUs
Purchase: 319 MUs
Supply: 996 MUs
Purchase: 114 MUs
Purchase: 1174 MUs
Supply: 426 MUs
Purchase: 3515 MUs
Supply: 4829 MUs
*Includes trading volumes from cross border
#Includes trading volumes from cross border and IEX
Supply: 8 MUs Purchase: 5579 MUs
NEPAL BHUTAN
Map not to Scale
13
Cross Border Trades with Bhutan and Nepal
Bhutan
Long term agreements in place for purchase of power from
Bhutan
Chukha: 336 MW
Kurichhu: 60 MW and
Tala: 1,020 MW
From the above mentioned three active projects in Bhutan,
PTC purchased
5,228 MUs in FY 2008
5,579 MUs for 9 month period ended Dec 31, 2008
Nepal
Long term agreement initialed for purchase of entire power
from 750 MW West Seti hydro-electric power project in Nepal
The purchase of power has not started as yet
Active engagement in the development of Indo – Nepal
transmission interconnection for enhancement of power trade
PTC is also a member of Indo-Nepal Power Exchange
Committee
Nepal
West Seti: 750MW
Bhutan (1416 MW)
Chukha: 336MW
Kurichhu: 60MW
Tala: 1,020MW
Capacities available to PTC for cross border trades
Map not to Scale
14
Long term arrangements for trading business
Strategizing to increase the volume and mix of Medium and Long
term trading contracts
To reduce volatility in trading volumes
Entering into Long term PPAs with new IPPs and Captives with
surplus capacity
Investments into power projects to increase the trading volume
PTC has entered into PPAs and MoUs to procure long term power
PPAs** initialed/ signed for 11,226 MW*
MoUs for Long Term Purchase for 25,907 MW*
PTC has entered into PSAs/ MoUs^ to ensure long term sale of
power
PSAs finalised for 4,790 MW*
MoUs signed for 1,200 MW*
As of March 31, 2009, 37,133 MW of PPAs/ MoUs initialed/ signed and 5,990 MW of PSAs/ MoUs signed
*As of March 31, 2009; **Includes West Seti (750 MW) hydro project in Nepal, Chukha (336 MW), Kurichhu (60 MW) and Tala (1020 MW) in Bhutan;^includes PSAs for cross border power from West Seti, Chukha, Kurichhu and Tala
Haryana (1335MW)
J&K (18MW)
Rajasthan (219MW) Uttar Pradesh (595MW)
Madhya Pradesh (700MW)
Chandigarh (250MW)
States with PSA/ MoU signed
IPPs with PPAs
Punjab (1542MW)
Sikkim (7MW)
Bihar (360MW)
Jharkhand (153MW)
West Bengal (527MW)
Orissa (253 MW)
Delhi (30MW)
Map not to Scale
15
Investments in Energy Value Chain: PFS
Scope of business activities
Invest in Greenfield projects, Brownfield projects and provide expansion capital on an ongoing basis
To the companies engaged in identified target sectors
Term Financing
Financial solutions and advisory
Strategic financial partnership in PTC India Financial Services to bring in: Fund management best practices Strong relationship with global investors
To provide Investment and Financing solutions for the broader Energy Value Chain
Investment Spectrum
Power Exchange
Tolling projects
Biomass projects
Wind projects
Thermal projects
Solar projects
Investment in cross border transmission link
16
Thermal - Coal Projects
Wind Projects
Biomass Projects
Investments in Energy Value Chain: PFS
Power Exchange
Investment Highlights
26% stake in 189 MW project in Tamil Nadu 26% stake in 270 MW project in Andhra Pradesh* 10% stake in 700 MW project in Tamil Nadu* Proposed investment up to Rs 500 million in 300 MW project in Maharashtra*
Solar Projects
Electricity Equipment
India’s first electricity trading platform Made investment for 26% stake Total volumes traded approx. 3,540 MUs as of December 31, 2008
26% stake in an SPV - 10 MW Biomass project in Maharashtra 26% stake in a holding company, which will undertake series of 12 MW biomass projects across India
37% stake in upcoming 99.45 MW integrated wind cum bio-diesel project in Maharashtra
37% stake in a 3 MW solar power project in Haryana*
Investment of Rs 33.7 million for Wind turbine manufacturing unit in Haryana
Strong disbursal record – Total commitments of Rs 3,763.81 million for projects aggregating to 1,572 MW capacity and made disbursals of Rs.1,397.63 million till March 31, 2009
* Sanctioned by PFS, disbursement yet to take place
17
BARAK POWERBARAK POWER
WIND POWER ASSETSWIND POWER ASSETS
KRISHNA GODAVARI KRISHNA GODAVARI POWER UTILITIESPOWER UTILITIES
TEESTA URJA LIMITED TEESTA URJA LIMITED (TEESTA URJA)(TEESTA URJA)
Investments in Energy Value Chain (Cont’d.)
ATHENA ENERGY ATHENA ENERGY VENTURES (ATHENA)VENTURES (ATHENA)
Business Description Investment and Stake
Power project developmental company across generation, transmission and distribution assets
Subscribed for 20% equity stake in Athena for a commitment of INR 1,500mn
Invested INR 300 mn*
Current status
Athena won a bid to construct a 3000 MW Hydro plant in Arunachal Pradesh
Developing 2 coal based thermal power projects in Andhra Pradesh and Chattisgarh – 2640 MW
1,200 MW hydro electric project based in Sikkim, India
Board approval for subscribing to 11% stake in Teesta Urja for a commitment of up to INR 1,360 mn
Invested INR 1,254 mn*
Achieved Financial Closure Expected to be commissioned by
FY 2013
63 MW imported coal based project in Andhra Pradesh
ESA signed for subscribing to 52% equity stake in Krishna Godavari for a commitment of up to INR 400mn
Invested INR 152.5 mn*
Achieved Financial Closure Expected to be commissioned by
FY 2010
6 MW capacity wind power project in Maharashtra
Direct execution of project by PTC Project cost of INR 361 mn
Commissioned in March 2008 Agreement with MSEDCL for
purchase of power
A Joint Venture between PTC and BHEL for setting up 2x125 MW coal based thermal power station at Silchar, Assam
Subscribed for 50% equity stake in the JV
Expected to be commissioned by FY 2014
* As of December 31, 2008
18
Fuel Intermediation
PTC plans to play the role of aggregator of fuel
Intend to purchase imported coal from individual
suppliers
Arrange for the aggregated amount to be sold to
power plants for processing
Such fuel would also be used for PTC’s Power Tolling
Arrangements
Presently in discussions to enter into long term
arrangement to secure fuel
PTC has entered into MOU with Indonesian coal mine
for supply of 1 million tons of thermal coal annually for
a period of (15 + 5 years), terms of which are under
negotiations
In addition, the other options are also being evaluated
Opportunity to be a strategic partner in a vehicle for
acquiring coal assets
PTC plans to invest into coal assets overseas for securing
fuel supplies
Long term arrangements
Long term arrangement for supply of 1 mtpa coal
Investment in vehicle
Opportunity to be a strategic partner in a SPV
Acquiring coal mines
equity stakeMoU/ Arrangements
19
Power Tolling Arrangements
Power Tolling Arrangement
PTC to procure fuel (coal) for the power plant and
pay an energy conversion charge to IPP
The power so procured is to be owned and traded
by PTC
Power Tolling Agreements (“PTA”) for 360 MW (in AP)
with 2 power projects already in place
PTA for a period of 25 years signed with two power
projects of 270 MW capacity each
Both the projects are based on imported Coal and
PTC needs to arrange for the imported coal
PTC has entered into MoU with Indonesian coal mine for
supply of 1 million tons of thermal coal annually for a
period of (15 + 5 years), terms of which are under
negotiations
In addition, the other options are also being evaluated
UTILITIES
Purchase of coal at competitive prices
Supply of coal to IPP as per PTA
Purchase of power after paying conversion
charge
Sale of power at market prices
20
Uniquely Positioned: Relationships
Historical Relationships
Government of India
Government of Bhutan
Public Sector Undertakings
State Governments and State Utilities
Independent Power Producers
Financial Institutions
Reputable financial investors
Indo Norwegian Program for Institutional
Cooperation (INPIC)
United States Energy Association
New Relationships
Athena Power Projects Limited and IDFC
Partners in Athena Energy Ventures Limited
Nepal Electricity Authority
Partners in Transmission Venture
Financial Technologies of India Limited
Partners in India Energy Exchange
Goldman Sachs and Macquarie
Strategic financial partners in PTC India
Financial Services Limited
BHEL
JV partner in Barak Power Private Limited
Leveraging on established relationships to diversify into new businesses and develop new relationships
21
Agenda
PTC India - OverviewPTC India - Overview
Unique Business ModelUnique Business Model
Key Financials and Strong Management TeamKey Financials and Strong Management Team
HighlightsHighlights
22
PAT (in INR mn)
Key Financials
Revenues (in INR mn)
20,373
31,205
37,859 39,493
54,280
0
10,000
20,000
30,000
40,000
50,000
60,000
FY 2005 FY 2006 FY 2007 FY 2008 9 months FY 2009
Key Financial Highlights
Revenues growing at a CAGR of 24.7% over the last three years
Revenues for 9 months FY09 were at Rs 5,428 Cr, up ~37.4% from FY08 on account of
New clients and
Trading on IEX
243
406352
486
753
0
200
400
600
800
FY 2005 FY 2006 FY 2007 FY 2008 9 months FY2009
23
Strong Board and Management Team
Senior Management Team Years of experience
Board of Directors
Mr. T. N. Thakur Chairman and MD 32
Mr. Shashi Shekhar Director 28
Mr. Deepak Amitabh Director 24
Mr. Ashok Haldia Director 27
Mr. Arun Bhalla Executive Director 34
Mr. S. S. Sharma Executive Vice President 34
Mr. Rakesh Kumar Executive Vice President 27
Mr. Arun Kumar Executive Vice President 32
Mr. Sanjeev Mehra Executive Vice President 26
Mr. R. C. Chaudhary Vice President 34
Mr. P. Varshney Vice President 32
Mr. Harish Saran Vice President 21
Mr. V. S. Bisht Vice President 24
Mr. Hiranmay De Vice President 22
Ms. Puja Mehrish Vice President 21
Mr. Bimal Dhar Vice President 28
Ms Padma Rao Vice President 15
Mr. Suman Ghosh Vice President 20
Mr. T. N. Thakur Chairman and MD
Mr. Shashi Shekhar
Mr. Deepak Amitabh
Mr. Satish Mehta
Director
Director
Director – Jt. Secy MEA
Mr. I.C.P.Keshari Director – Jt. Secy MoP
Mr. I. J. Kapoor Director (Nominee of NTPC)
Mr. M. K. Goel Director (Nominee of PFC)
Mr. A.B.L Srivastava Director (Nominee of NHPC)
Mr. R. G. Yadav Director (Nominee of POWERGRID)
Mr. G. P. Gupta Independent Director
Mr. D. P. Bagchi Independent Director
Mr. M. S. Verma Independent Director
Mr. P . Abraham
Mr. S. Balachandran
Independent Director
Independent Director
Professionally managed company with corporate governance structure in line with global best practices
Experienced and stable senior management teamCorporate governance structure in line with
global best practices
24
Agenda
PTC India - OverviewPTC India - Overview
Unique Business ModelUnique Business Model
Key Financials and Strong Management TeamKey Financials and Strong Management Team
HighlightsHighlights
25
Highlights
Steady Progress to emerge as an Integrated Energy PlayerSteady Progress to emerge as an Integrated Energy Player
Demonstrated Growth in Core Trading BusinessDemonstrated Growth in Core Trading Business
Presence in Energy value chain by diversifying into related Energy BusinessesPresence in Energy value chain by diversifying into related Energy Businesses
Experienced and Strong Management TeamExperienced and Strong Management Team