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PTC INDIA LTD.
INVESTOR PRESENTATION FEBRUARY 2014
THE AGENDA
THE
INDUSTRY THE
COMPANY
THE
PERFORMANCE
THE
STRATEGY
2
INDUSTRY OVERVIEW
5th largest generation
capacity (~234 GW)
A fair mix of Central,
State and Private
capacity
Target to establish
65,500 MW of inter-
regional power transfer
capacity by end of 12th
plan - 2017 (current -
31,850 MW)
Trading volumes are
also expected to
multiply with growth of
transmission capacity
Private sector’s share
in installed generation
capacity increased to
32.5%; total 76 GW in
Dec-13 from 15%;
22.2 GW in Dec-08
Energy and peak
deficit reduced to 5%
and 4% respectively in
5 years from 13% and
10% respectively
13% 10%
11% 9%
5%
10% 9%
9% 9%
4%
0%
5%
10%
15%
20%
25%
2009-10 2010-11 2011-12 2012-13 2013-14*
Energy Deficit Peak Deficit
Sector Thermal Nuclear Hydro RES Total %
Central 52500 4780 9717 0 66997 28.6
State 59627 0 27482 3726 90836 38.8
Private 47665 0 2694 25735 76095 32.5
Total 159794 4780 39893 29462 233929 100.0
% 68.3 2.0 17.1 12.6 100.0
India - Installed capacity (MW) (as on 31.12.2013) * Till December 2013
3
All India Power Statistics (BUs)
FY
Total Power
Generation
Short Term
Trade
(Excluding UI)
% of Short
term Trade
2009-10 764.03 40.09 5.2%
2010-11 809.45 53.48 6.6%
2011-12 874.17 66.75 7.6%
2012-13 907.49 74.18 8.2%
TRENDS & VOLUMES
764.03
809.45
874.17 907.49
40.09
53.48
66.75
74.18
0
10
20
30
40
50
60
70
80
650
700
750
800
850
900
950
2009-10 2010-11 2011-12 2012-13
Total Generation
Short Term
4
EVOLVING INDUSTRY STRUCTURE
GENERATION/
SUPPLY
Central/ State Generating
Companies Private Generating
Companies PTC/ Other Trading
Companies
Transmission Licensees
(Power Grid, State and Private)
State/ Private Discoms Bulk Consumers Other Open Access
Consumers
REGULATION,
LAWS &
POLICIES
CERC, SERCs,
APTEL
DISTRIBUTION
(CARRIAGE &
CONTENT SEPARATION)
5
RECENT INDUSTRY DEVELOPMENTS
Financial Restructuring
Packages (FRPs)
Signed by 4 State
Utilities; 3 more to
follow
Standard Bidding
Documents (SBDs) for
procurement of power
by utilities (long-term
and medium term)
notified
Compensatory tariff
mechanism; central
regulator (CERC)
recognises the need
for adjustments to past
bid tariffs
Open Access;
availability at 1 MW
Revised Tariff
Regulations for Inter-
state Generation and
Transmission (2014-
19)
6
THE AGENDA
THE
INDUSTRY THE
COMPANY
THE
PERFORMANCE
THE
STRATEGY
7
SHAREHOLDING PATTERN
PROMOTERS NTPC - India’s largest
thermal utility
POWERGRID - India’s
Central Trans. Utility
(CTU)
PFC – Development
Financial Institution (DFI)
dedicated to the power
sector
NHPC – India’s largest
hydro utility
16.20%
15.61%
9.93%
21.78%
16.11%
7.82%
9.54% 3.01%
Promoters Mutual Funds Banks and Fis
Insurance Companies FIIs Corporates
8
SUBSIDIARIES
PTC Financial Services (PFS)
100% subsidiary, incorporated in 2006
Started its business operations in late 2007 by
taking 26% equity stake at par in India Energy
Exchange.
Infrastructure Finance Company (IFC) status in
August 2010
Listing on Indian exchanges in 2011
Maiden Dividend in 2012-13
Disbursement about INR 3300 Crs (USD 550
MM)
PTC Energy Limited (PEL) -
100% subsidiary, incorporated in 2009
Purchase of imported fuel and onward sale to
power plants under tolling arrangements
Supply coal under different structures i.e. on
Spot, Short, Medium or Long Term basis
Exploring avenues for adding new suppliers
and buyers under its umbrella of fuel
intermediation on competitive basis
Joint venture partner for development of
energy assets
Undertaken strategic investment for
development of wind farm in Tamil Nadu
PTC’s lineage
Debt Financing
Equity Financing
Structured Products
Fee Based Services
Across energy Value
Chain
9
MILESTONES
Commenced
sustained
Business
Operations
2001
Listed on NSE and
BSE
2004
Market leader
in OTC Trade
2013
2007
Established PTC
Financial Services
PTC India Financial
Services Listed on NSE
and BSE
2011
Established PTC
Energy Ltd.
2009
Incorporated
1999
2002
Cross
Border
Trade
First Long Term Sale
Transaction
2014
Export
power to
Bangladesh
10
COMPANY OVERVIEW
• Pioneer in implementing the power trading concept in India
Leading provider of power trading / OTC solutions in India
Partnered IPPs and lenders / institutions for the development of India’s 2nd generation IPP
program based on a multi-buyer model
Partnered the development of India’s first Power Exchange
Current operations at 32 BUs (equivalent 4566 MWs) plus traded volumes (9MFY14 ~28 BUs); set
to grow to ~ 92 BUs by FY17
Our Vision:
“To be a frontrunner in power trading by developing a vibrant power market
and striving to correct market distortions”
11
COMPANY OVERVIEW
Trading Portfolio – balanced mix Medium & Long term / Short-term / Retail & Tolling
• Increasing volume and mix of Medium and Long term trading contracts
o Long term PPAs with Utilities / IPPs and Captives with surplus capacity
o Investments in power projects to increase trading volumes
Creating products for adding depth to the short-term market (Round-the-Clock / Peak/ Off-Peak /
Weekend or Holiday power / Day-Ahead / Banking / Retail
Bhutan - Long term agreements in place for purchase of 1420 MW of hydro power
Nepal –
Agreement for export of 150 MW coal-based thermal power on long-term basis
Active engagement in the up-gradation of Indo – Nepal transmission interconnections for
enhancement of power trade
Bangladesh – Commencement of export of 250 MW
*As of 31 March, 2013 and includes cross border and power tolling also
12
LONG TERM PPA PIPELINE
11 GW of capacity – tied with various power producers / IPPs.
~3.1GW is already operational and is being sold
~4.8 GW capacity is est. to be operational for long-term sales during the FY15 and FY16
o 14 thermal units and 11 hydro based units
~3.1GW capacity is est. to be operational for long-term sales during FY17.
o from 6 thermal units
Power Trading – Medium / Long term
Long term Capacities
Capacity
(GW)
Stand
By
PPA
Total
Capacity
Cross
Border
Grand
Total
2012 - 2013 1.0 0.2 1.1 1.4 2.6
Added During 2013 - 2014 0.6 0.6
Added During 2014 - 2015 1.4 1.4
Added During 2015 - 2016 3.5 3.5
Added During 2016 - 2017 3.1 3.1
Cummulative Upto 2016 - 2017 9.5 0.2 9.7 1.4 11
Year Wind
Thermal Gas Hydro Total Total
2012-2013 1 2 1 9 13 13
2013-2014 - 3 1 - 4 17
2014-2015 - 5 - 1 6 23
2015-2016 - 4 1 1 6 29
2016-2017 - 6 - - 6 35
Total 1 20 3 11 35
No of Projects
13
COMPANY OVERVIEW
A Word on Retail (Direct-to-Business) and Power Tolling Segments
Retail (Direct-to-Business) segment
o PTC’s retail operations now cover over 200 businesses / establishments who are Open-Access
customers; 9MFY14 volumes traded at ~1.8 Bus
o Set to grow to ~12BUs by FY17; major impetus also expected from changes proposed in the
Electricity Act
Tolling Arrangements
o The model has PTC supplying fuel (coal) for a power plant, and paying a tolling / conversion charge
to the IPP; power onsold by PTC for short-term periods
During FY14 PTC revisited the current risk-return equation of Tolling business; converted operating
agreements to minimal risk PPAs.
Model remains part of PTC’s long-term strategy, to be invoked only in scenarios of moderate risk.
14
THE AGENDA
THE
INDUSTRY THE
COMPANY
THE
PERFORMANCE
THE
STRATEGY
15
KEY FINANCIALS
11 364 927
2378 20373120
3785 3949
6626
7845
90607701
8869 8662
08 20
49 3757
46 59
113132
197166
178
260
-50
0
50
100
150
200
250
300
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
Turnover (Rs. Crs) PBT (Rs.Crs)
* Nine months ended December-13
Figures in USD MM
16
Year 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14*
Turnover 61 155 396 340 520 631 658 1104 1307 1510 1283 1478 1444
PBT 1.3 3.3 8.2 6.1 9.5 7.6 9.8 18.9 22.0 32.8 27.6 29.7 43.4
PHYSICAL PERFORMANCE - SNAPSHOTS
Segments
Apr’13 – Dec’13 (%) of Total
Trade
Apr’12 – Dec’12 (%) of Total
Trade (Units in Millions) (Units in Millions)
Short Term Trades* 16,272 59.23% 12,840 58.73%
Medium Term Trades 722 2.63% 876 4.01%
Long Term Trades** 9,323 33.93% 7,487 34.24%
Tolling/PPA 1,144 4.16% 648 2.96%
Generation 13 0.05% 13 0.06%
Total 27,474 100.00% 21,864 100.00%
* Short Term Trades also includes trades on power exchanges; **Long Term Trades also includes trades from Cross
Border.
0.041.6
4.2
11.0
8.9
10.1 9.5
9.9
13.8
18.2 24.524.3
28.6
27.5764.03809.45
874.17 907.49
719.20
0
100
200
300
400
500
600
700
800
900
1000
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
PTC Trading Volumes(BUs) Total Power Gen. 17
WHAT THE TRENDS UNDERLINE….
Focus on balanced development of trading business portfolio for sustained growth
o PPAs on long-term basis in place for ~11,000 MW, out of which on-sale arrangements tied up for an aggregate capacity of ~7,500 MW
Long term volume will move to 50% plus of total trading volume in 2016-17 from 34% in 2013-14
Robustness of PTC’s business model; growth in business volumes in an
evolving regulatory and policy environment, and constrained physical
infrastructure.
PTC to continue to consolidate its leadership position and maintain
growth in volumes and retain customers on the strength of capability and a
`solution provider’ approach.
18
THE AGENDA
THE
INDUSTRY THE
COMPANY
THE
PERFORMANCE
THE
STRATEGY
19
Key Steps towards consolidation
• Strengthening Management team
• Extensive Review of products – Long-term business portfolio
– Tolling
– Retail (Direct-to-Business) segment.
• Robust Risk Management process and structure
• Resolution of major commercial / sale issues
• Active engagement for subsidiaries’ objectives; moderate risk opportunities
20
Way Forward
Industry level
• Amendment of Electricity Act; separation of carriage and content at
distribution level
• Notification of model SBDs restricts role of power trader; validity of
model to be tested
21
Way Forward (contd…)
• Company level
– Management of long-term PPAs and onsale;
• Sanctity of contracts ensured through key provisions
• Review shelf of PPAs periodically
• Development of Retail Market
– Resource Deployment
• With growth in volumes to 90 BUs plus by 2016-17, working
capital requirement will also go up
• Additional Investible corpus to be deployed and leveraged for
new growth opportunities in the sector
22
