The Tata Power Company Limited
Investors’ Meet - February 2009
1
Disclaimer
Certain statements made in this presentation may not be based on historical information or facts and may be
“forward looking statements”, including those relating to The Tata Power Company Limited’s general business plans
and strategy, its future outlook and growth prospects, and future developments in its industry and its competitive
and regulatory environment. Actual results may differ materially from these forward-looking statements due to a
number of factors, including future changes or developments in The Tata Power Company Limited’s business, its
competitive environment, its ability to implement its strategies and initiatives and respond to technological changes
and political, economic, regulatory and social conditions in India.
This presentation does not constitute a prospectus, offering circular or offering memorandum or an offer to acquire
any Shares and should not be considered as a recommendation that any investor should subscribe for or purchase
any of The Tata Power Company Limited’s Shares. Neither this presentation nor any other documentation or
information (or any part thereof) delivered or supplied under or in relation to the Shares shall be deemed to
constitute an offer of or an invitation by or on behalf of The Tata Power Company Limited.
The Company, as such, makes no representation or warranty, express or implied, as to, and do not accept any
responsibility or liability with respect to, the fairness, accuracy, completeness or correctness of any information or
opinions contained herein. The information contained in this presentation, unless otherwise specified is only current
as of the date of this presentation. Unless otherwise stated in this document, the information contained herein is
based on management information and estimates. The information contained herein is subject to change without
notice and past performance is not indicative of future results. The Tata Power Company Limited may alter, modify
or otherwise change in any manner the content of this presentation, without obligation to notify any person of such
revision or changes. This presentation may not be copied and disseminated in any manner.
THE INFORMATION PRESENTED HERE IS NOT AN OFFER FOR SALE OF ANY EQUITY SHARES OR ANY
OTHER SECURITY OF THE TATA POWER COMPANY LIMITED.
2
Agenda
•
Part A: Overview of Tata Power
•
Part B: Power Business
– Section 1: Generation
– Section 2: Fuel & Logistics
– Section 3: T & D
– Section 4: Power Trading
•
Part C: Other Businesses
•
Part D: Financial Performance
•
Part E: Sustainability
3
Part A: Overview of Tata Power
4
A Tata Company
5
Tata Power: Introduction
•
Largest private, integrated utility company in India today with presence across the
value chain in fuel, generation, T&D and trading
•
Founded in 1906, to supply hydro-electric power to Mumbai. Set-up thermal
generation in Trombay in 1960s
•
•
•
Expanded outside Mumbai with IPP (Belgaum) and CPP (Tata Steel) in 1990’s
Thrust on renewables including wind, hydro and solar
Successful Public Private Partnerships in generation, transmission and distribution
6
Pioneer in Power Sector
First 800 MW
thermal unit
First pump
storage unit
in the country
of 150 MW Capacity
First to Introduce
SCADA and
Fibre Optic
ground wire
communication
Flue Gas
De-sulphurisation
plant using
sea water
220 kV
Cable
Transmission
220 kV
Network
transmission
Computerized
lines in
grid control
First
four circuit
and energy
gas
towers
management
First
insulated
system
500 MW switch
First
150 MW thermal gear
thermal unit
unit
7
Existing Presence in Power Sector
Tala Transmission
NDPL
Jojobera 428 MW
Samana 29 MW
Trombay 1330 MW
Mumbai Distribution
Mumbai Transmission
Hydro 447 MW
Supa 17 MW
Haldia 90 / 120 MW
Khandke 51 MW
Bramanvel 11 MW
Thermal (1839 MW)
Belgaum 81 MW
Gadag 16 MW
Hydro (471 MW)
Wind (124 MW)
Transmission
Other Projects:
1. Indonesian Coal Mines: 30% stake
2. Geodynamics: 10% stake
3. Exergen: 5% stake
Distribution
8
Tata Power Group – Major Companies
Tata Power
Subsidiaries
100%
100%
100%
74%
Joint Ventures
Coastal Gujarat
Power Ltd
49%
Tata Power Trading
Company Ltd`
40%
Trust Energy
Resources Pte Ltd
33%
Tata BP Solar Ltd
Tubed Coal
Mine Ltd
Mandakini Coal
Mine Ltd
Maithon Power
Ltd
74%
Industrial Energy
Ltd
51%
North Delhi
Power Ltd
51%
Powerlinks
Transmission Ltd
50%
Nelco Ltd
Associates
30%
KPC
30%
Arutmin
40%
9
•
•
•
•
•
•
•
•
•
•
•
Trombay
14, 25
Hydro
14, 32
Jojobera
23
Belgaum
14
Haldia
27
Wind Farm 33-35,60
Solar PV
49
Mundra
Maithon
Tata Steel JV (IEL)
Tata BP Solar
Transmission
•
•
Mumbai
Tala
42
Distribution
•
•
Mumbai
Delhi
42
•
Tata Power Trading
•
•
•
•
•
Indonesian Coal Mines
Coal Bed Methane
Mandakini
Tubed
TPC Asia
Businesses
Generation
Division
Other Entities
Power Business
Tata Power
Trading
Fuel & Logistics
Other Business
•
SED
•
NELCO
48
Refer to page numbers in black, for details
10
Part B: Power Business
– Section 1: Generation
– Section 2: Fuel & Logistics
– Section 3: T & D
– Section 4: Power Trading
11
Generation: Business Models
12
Impact of New CERC Norms
13
Tata Power: Existing Operations
Mumbai Licence Area (1777 MW)
Trombay - Thermal
Hydro Power Generation
Unit 4
150 MW
Oil & Gas
Khopoli
72 MW
Unit 5
500 MW
Oil, Coal & Gas
Bhivpuri
75 MW
Unit 6
500 MW
Oil & Gas
Bhira
300 MW
Unit 7
180 MW
Gas
Total
447 MW
Total
1330 MW
Wind 124 MW
Jojobera
428 MW
Belgaum
Haldia
90 MW
81 MW
CPP
IPP
14
CPP
Thermal Projects Under Implementation
Maithon1050 MW
Jojobera/Jamshedpur 240 MW
Mundra 4000 MW
Haldia 30 / 120 MW
Trombay 250 MW
Thermal (5570 MW)
15
Project Capacity
• 4000 MW (5 x 800 MW)
Ownership Structure • 100% subsidiary: Coastal Gujarat Power Limited
Business Model
• Case 2
Customers
• Gujarat (1805 MW), Maharashtra (760 MW), Punjab (475 MW),
Haryana (380 MW), Rajasthan (380 MW)
Funding
• Project Cost: Rs 17,000 Crore (D/E: 75:25)
• Financial closure completed in April 08 – lenders such as IFC, ADB
Completion
• Targeted by 2012 vs 2014 as per bid conditions
Project Description • Fuel: 10 mtpa offtake agreement with KPC/Arutmin - 50% for Mundra.
Pricing part fixed and part linked to CERC index
Mundra
UMPP
16
Project Milestone
• Over 13% work already completed
Construction
Activities
• Structural erection is in progress for two boiler units and civil work is
progressing well at site
On-site
• Over 2500 people already located on site
Funding
• CGPL completed all pre-disbursement conditions and received its first
disbursement of loans in this quarter on contracted terms
Mundra
UMPP
17
Mundra - Boiler and TG Building
18
Mundra - Cooling Water Conduits below TG Rafts
19
Project Capacity
• 1050 MW (2 x 525MW)
Ownership Structure • Maithon Power Limited 74: 26 JV of Tata Power and Damodar
Valley Corporation
Business Model
• Regulated
Customers
• DVC (300 MW), NDPL (300 MW), WBSEB (150 MW), PSEB (300 MW)
Funding
• Project Cost: Rs 4450 Crores
• (D/E: 70:30)
• Debt syndication completed
Completion
• Unit 1: 2010, Unit 2: 2011
Project Description
• Fuel: Linkage Coal, initial supply by DVC
Maithon
20
Project Milestone
• Over 21% of work completed
Ordering
• Ordering for all packages completed
Construction
Activity
• Column erection completed for Boiler Unit-1
• Foundation completed for Boiler Unit-2
Fuel Supply
• Coal linkage sanctioned. Active discussions on to sign Fuel Supply
Agreements with coal mines
400 KV Switchyard
Column Casting
21
Unit 1- Erection of column & roof girder
Unit 1- Column casting in
progress for TG deck slab.
Unit - 2 Foundation work
Unit 1- Mill Bunker
22
JAMSHEDPUR (PH #6)
Project Capacity
• 120 MW
JOJOBERA (Unit #5)
• 120 MW
Ownership Structure • IEL (74:26 JV of Tata
Power and Tata Steel)
• IEL
Business Model
• CPP
• CPP
Funding
• Project Cost: Rs 490 Crores
• Project Cost: Rs 620 Crores
• D/E 70:30
• D/E 70:30
Completion
• March 2009
• December 2009
Project Description
•
•
Fuel: Coke oven gases of Tata
Steel
Fuel: Linkage from West Bokaro and Mahanadi
Coal field.
Captive Power
Plants
23
Jamshedpur (PH #6) – Site Photographs
TG Rotor erection
IDCT Commissioned
24
Project Capacity
• 250 MW
Ownership Structure • Tata Power Division
Business Model
• Regulated + Merchant
Funding
• Project Cost: Rs 1066 Crore
• D/E 70:30
Completion
• Synchronized in January 2009
• Commissioning by March 2009
Project Description
• Fuel: Imported coal
Trombay Unit 8
25
Trombay (Unit 8) – Site Photographs
26
Project Capacity
• 120 MW (2 x 45 MW + 30MW)
Ownership Structure • Tata Power Division
Business Model
• Merchant and Regulated
Customers
• Hoogly Metcoke, PPA with Tata Power Trading and WBSEDCL
Funding
• Project Cost Rs 605 Crores
• D/E 70:30
Completion
• 1st two 45MW units commissioned in August ‘08 and December ‘08
• 3rd unit expected to commission in March ‘09 (30MW)
Project Description
• Fuel: Hot flue gases from Hoogly Metcoke
Haldia
27
Haldia – Site Photographs
2
1
TG Unit # 1 & 2 in operation
Boiler # 3 – 2 under erection
28
Projects in Pipeline
Total
Planning & development activities initiated
29
5670
Captive Coal Blocks
Mandakini Coal Block
• 7.5 MTPA (jointly allotted with Jindal Photo Film and Monnet Ispat & Energy - each
JV Partner having a share of 2.5 MTPA) at Dist. Angul, Orissa
• Submission of EIA Report: Jan / Feb ‘09
• Approval of mining plan by MoC: Jan / Feb ‘09
• Start of Production: July 2011
Tubed Coal Block
• 5.75 MTPA [Jointly allocated with Hindalco at Latehar, Jharkhand – Hindalco (60%)
3.45 MTPA & Tata Power (40%) 2.30 MTPA]
• Submission of application for Environmental Clearance: Mar 2009
• Submission of Draft Mining Plan to MoC: Jan 2009
• Start of Production: Sep. 2011
30
Generation Capacity (Tata Power Group)
Tata Power - Capacity
14000
12000
5200
10000
Capacity in MW
8000
3075
6000
4000
2000
0
2365
2008
613
2365
2009
7398
1125
220
2978
3198
2010
2011
Year Ended Mar 31
31
4323
2012
2013
Added in the Year
Opening Capacity
Hydro Electric Power
•
Oldest and one of the largest private sector players with capacity of 447 MW
•
Several awards and recognitions – Bhira Pump Storage Scheme received the CEA
Silver Shield
•
Agreed to take 26% equity stake in 114 MW Dagachhu Hydro Electric Power Project
being developed by The Royal Government of Bhutan
•
MoU with a European firm to jointly develop hydro opportunities in India and Nepal
•
Actively exploring additional 1000 MW in large hydel projects including India, Nepal,
Bhutan etc – final stages of negotiations for 120MW, with import of power
32
Initiatives In Renewables
• 124 MW operational
• 72 MW to be commissioned – 52 MW by March ’09, 20 MW by April ‘09
• 300 MW being additionally explored
• Developing a 3 MW grid connected solar PV farm in Maharashtra
• Evaluating potential for concentrated solar thermal (CST) generation
• Signed MoU with Govt. of Gujarat for 5 MW solar plant
Renewable /
Clean Coal
Other
Initiatives
• Acquired 10% stake in Geodynamics Limited, Australia
• Acquired 5% stake in Exergen, Australia
• Signed MoU with Govt. of Gujarat for 5 MW geothermal plant
• Exploring micro hydel opportunities
• Actively looking for fuel cell technology partners to pursue opportunities in
the Indian market
• Exploring feasibility of standalone biomass based power plants
• Exploring possibilities of large scale geothermal generation
33
Installed Capacity
• 124 MW
Project Under
Implementation
• 73 MW
(35 MW Karnataka, 21 MW Gujarat, 17 MW Maharashtra)
Ownership Structure
• Tata Power division
Business Model
• Regulated
Funding
• Project Cost: Rs 633 Crores
Completion
• March - April 2009
Project Description
• Turnkey projects by Enercon
Wind Farms
34
Wind Projects Under Implementation
Samana 21 MW
Sadawaghapur 17 MW
Gadag 35 MW
Wind (73 MW)
35
Part B: Power Business
– Section 1: Generation
– Section 2: Fuel & Logistics
– Section 3: T & D
– Section 4: Power Trading
36
Fuel
Fuel supplies
fo
r new projects
fo
37
25
0
r2
rs
a
e
y
Indonesian Coal Mines
Deal Highlights
Performance
• Acquired 30% equity stake in KPC and
Arutmin from PT Bumi Resources,
Indonesia
• Quantity mined in Jan-Sep 2008 ~
37MT
• Acquisition value of USD 1.1 bn
• Average realised price per tonne (FOB)
– US$70.5 (Jan-Sep 2008)
• Off-take contract with KPC for 10.5
mtpa ± 20% (at Tata Power’s option)
• EBITDA from Operations – US$792
millions (Jan-Sep 2008)
Source – Bumi Resources
Loading port – all
weather, capable of
handling cape size
vessels
Mining operations
are efficient – Rio
Tinto and BHP
practices followed
Loading portLoading
at KPC port at KPC
Coal conveyor belt at KPC
38
Coal conveyor belt at KPC
Trust Energy Asia Pte Limited
•
SPV incorporated in Singapore for owning ships to meet shipping requirements and
trading in fuels
•
Present shipping requirements of 8-9 vessels for Mundra
•
To be met through a combination of long term charters and out right purchases – 3 LT
charters signed and 2 Korean build vessels purchased for delivery in 2011
•
Spare capacity may be used commercially
39
Part B: Power Business
– Section 1: Generation
– Section 2: Fuel & Logistics
– Section 3: T & D
– Section 4: Power Trading
40
Distribution Opportunities
• Second License – parallel licensing unlikely to happen soon
• Privatization – not much progress in replicating Delhi model
• Outsourcing – opportunity for marginal players
• Franchisee Opportunity – window is open for private participation
41
Mumbai: Transmission and Distribution
•
23,000 customers with 2500 MUs of sales (mostly to high value bulk consumers)
•
17 receiving and distribution stations, 318 consumer substations and 1335 Kms of HT
& LT Cable network. Total asset base over Rs 1400 crores
•
MERC regulated tariff with 16% RoE on distribution and 14% on transmission.
Incentive on reducing ATC losses
•
Supreme Court has held that Tata Power was entitled to effect supply of electrical
energy in retail directly to consumers
42
North Delhi Power Limited (NDPL)
• 51:49 JV of Tata Power and Delhi Vidyut
Praday Nigam (Govt. of Delhi)
• Over 1 million consumers with 5000 MUs
consumption and net asset base of over
Rs 1800 Crores
• Assured returns upto 16%, plus
incentives on loss reduction
YTD FY09: Sales – Rs 18.14 billion, PAT Rs 1.17 billion
Dividend – 12% on enhanced capital, after 1:2 bonus
AT&C Losses
43
Powerlinks Transmission Limited
•
•
•
51:49 JV of Tata Power and Power Grid Corporation of India
•
•
Total investment of Rs 1560 Crores (D/E 70:30)
1200 km 400 kV double-circuit transmission lines
Transmits power from Tala Hydroelectric Project and Eastern/North-Eastern region
to New Delhi and adjoining areas.
CERC based tariff (14% ROE) with incentive of 10% (pre-tax) as majoration charges
YTD FY09: Operating Income – Rs 1.67 billion, PAT – Rs 0.32 billion, Dividend – 8%
44
Part B: Power Business
– Section 1: Generation
– Section 2: Fuel & Logistics
– Section 3: T & D
– Section 4: Power Trading
45
Tata Power Trading Company Limited
TPTCL Sales (MU)
Role
6750
7000
•
6000
MUs
•
4500
5000
4000
3000
•
3000
2000
1000
0
1205
1711
674
•
76
'04-05
'05-06
'06-07
'07-08
'08-09
(E)
'09-10
(E)
'10-11 (E)
•
•
•
Identify and tap surplus power source in
the country
Locate a customer who is ready to pay
in cash the for power at its landed cost
inclusive of transmission losses
Settle commercial terms on both sides
such that trader’s open positions are
minimized
Organize and ensure physical delivery
(RTC control room operation)
Ensure payment security on both ends
Balance the risk within regulated trading
margin of 4 paisa
Develop the power trading market
YTD FY09: Operating Income – Rs 13.97 billion, PAT – Rs 0.04 billion, Dividend – 20%
46
Part C: Other Businesses
47
Strategic Electronics Division (SED)
•
•
Revenues of Rs.59 crores (Mar 08) against Rs.51 crores during the previous year.
•
•
•
Future revenue to come from MBRL Pinaka production order and Air Defence System.
•
Current revenue contributors include electronics system for the Rocket Launchers, Fire Control
Computers for Arjun Tank and Command and Control systems.
Defence spend over Rs. 400 bn, 40% indigenous. Expected growth ~ 15%.
SED expected to be granted Raksha Udyog Ratna status which will provide access to technology, prequalification benefits and defence R&D budgets
7 manufacturing licenses of SED to provide access to foreign vendors under domestic offset obligation
48
Tata BP Solar
•
•
•
•
51:49 JV between BP Solar and Tata Power
•
Growth plans include expansion of its module manufacturing facility and thrust on
domestic sales
Market leader in Solar Photovoltaic technology in India with turnover of Rs 660 Crores
Nearly 75% of sales from exports largely to Europe and USA
India’s first Polycrystalline Solar cell manufacturing plant and 45 MW module
manufacturing facility (largest in the region)
49
Part D: Financial Performance
50
Financials - Year Ended March 31, 2008
Year Ended
31-Mar-08
31-Mar-07
59.16
47.15
(49.79)
(39.92)
9.37
7.23
Interest & Finance charges
(1.42)
(1.89)
Depreciation
(2.91)
(2.92)
Other Income
4.66
3.44
Profit Before Tax
9.70
5.86
Provision for Taxes
(1.00)
1.11
Statutory Appropriations
(0.59)
(0.23)
8.11
6.74
Rupees in Billions
Operating Income
Operating Expenditure
Operating Profit
Profit After Tax
Dividend: Mar 2008 – 105%, Mar 2007 – 95%, Equity Share Capital – Rs.2.21 billion
51
Financials – Nine Months ended December 31, 2008
Quarter Ended
Nine Months Ended
31-Dec- 08
31-Dec-07
31-Dec-08
31-Dec-07
17.77
14.19
57.62
42.81
(15.17)
(11.51)
(49.21)
(34.98)
2.60
2.69
8.41
7.84
Interest & Finance charges
(0.78)
(0.44)
(0.95)
(0.99)
Depreciation
(0.81)
(0.70)
(2.30)
(2.13)
Other Income
0.25
0.41
1.85
2.41
Profit Before Tax
1.26
1.96
7.02
7.13
Provision for Taxes
(0.11)
0.01
(1.34)
(0.68)
Statutory Appropriations
(0.14)
-
(0.51)
-
1.01
1.97
5.17
6.45
Rupees in Billions
Operating Income
Operating Expenditure
Operating Profit
PAT after Statutory
Appropriations
52
Financials - Consolidated
Year Ended March 31, 2008
Year Ended
31-Mar-08
31-Mar-07
Operating Income
108.91
64.76
Operating Expenditure
(87.70)
(53.85)
Operating Profit
21.21
10.91
Interest & Finance charges
4.88
2.83
Depreciation
5.59
4.15
Other Income
4.79
2.67
Profit Before Tax
15.53
6.60
Provision for Taxes
(3.76)
0.99
Profit Before Minority Interest
11.77
7.59
Minority Interest/Associates
(1.22)
0.01
Profit After Minority Interest
10.55
7.60
Statutory Appropriations
(0.59)
(0.23)
9.96
7.37
Rupees in Billions
Profit after Statutory Appropriations
53
Tata Power – Financials (Standalone)
Annual Sales (MU)
Profit After Tax (In Billion Rs.)
EPS (in Rs.)
Net Worth (In Billion Rs.)
54
Dividend History
Earnings (Rs.)
40
40
Dividends (Rs.)
Payout ratio (%)
30
30
Rs.
20
20
10
10
0
0
2003
2004
2005
55
2006
2007
2008
%
Funding by Tata Power - Projects under
Implementation
Own Funds
(Rs.5,100 Crores)
Debt
(Rs.18,000 Crores)
• Internal accruals: Rs.2800 Crores
• Domestic loans through domestic
financial institutions, banks and
capital markets
• Remainder
– Disinvestment of various holdings
or assets
• Foreign loans through external
Credit Agencies and Multilateral
Agencies: ADB, IFC
– Equity dilution through warrants,
preferential issue and/or rights if
required
• Of the required debt, Rs. 15,700
Crores will be drawn from debt
already arranged
Total Fund Requirement (From Jan 2009 to March 2012): Rs.23,100 Crores
56
Part E: Sustainability
57
Climate Change
• Trombay SO2 emission of 24TPD (1330MW) - one of the most stringent
• Forum of 46 global companies: New policy framework on Combating
Climate Change (3C)
• Carbon Footprint for the Company completed
• Sustainability Council formed - 17 CDM Projects Identified
• Utilization of waste hot gases from steel plants for power generation
Renewable and Clean Coal Technology
• Solar Concentrated Thermal (SCT)
• Geo Thermal energy
• Coal Bed Methane (CBM)
• Coal beneficiation technologies
Wind Farms
• Existing installed Renewable plants
• CDM host country approval received for the 62 MW of the new wind farms
• 73 MW of wind power projects under implementation
• 17 MW in Maharashtra, 21 MW in Gujarat, 35 MW in Karnataka.
Demand Side Management
• DSM Workshop conducted for all utilities in Maharashtra
• Energy conservation awareness campaigns for Customers & School
• Launched “I will, Mumbai will” (joint Adv. campaign with other Dist. Lic.)
• Tata Power Energy Club formed for curbing energy wastage
Human Resource Management
• Long Term Settlement with the Union signed
• Succession Planning process implemented
• Competency Development exercise in progress
• Organization Transformation Initiatives are being implemented
Thank you
We take pride in
56