India's power sector, the private players in particular, are stressed from lingering debt and the unavailability of coal to expand capacity.
That's according to Bharat Rohra, the chief executive officer of Jindal Steel & Power Ltd.'s power business. “The government has come out with very ambitious programmes,” he said. “However, the state generating companies aren't geared up to purchase power from (private) companies because of the realisation of the power bills they have to pay for.”
“The discoms, rather than buying power, are resorting to power cuts despite power being available in the market.”
The industry is also witnessing a shortage of coal. JSPL currently imports 3.5 lakh tonnes of coal—around half its requirements. Despite that, the company is only employing 1,300-1,400 MW from its 3,400 MW capacity, he said.
Overall, the level of stress in the power sector is so huge that no private sector developer would not like to venture into more capex, Rohra said in an interview to BloombergQuint. “Yes, NTPC is doing capex and will continue to do so because of the PPAs they get on a platter.”
This is in contrast to a report by ICICI Securities which said, “We strongly believe that there's an immediate need to restart the capex cycle as government-led schemes such as Saubhagya, IPDS, DDUJY, etc. play out.”
Rohra expects a wave of consolidation in the industry as some power companies are facing insolvency proceedings at the National Company Law Tribunal.
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