Electricity in India

Industry Profile

Reference Code: 0102-0663 Publication date: October 2009

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EXECUTIVE SUMMARY

EXECUTIVE SUMMARY
Market Value The Indian electricity market grew by 26.9% in 2008 to reach a value of $115.2 billion. Market Value Forecast In 2013, the Indian electricity market is forecast to have a value of $198.3 billion, an increase of 72.2% since 2008. Market Volume The Indian electricity market grew by 16.4% in 2008 to reach a volume of 826.7 TWh. Market Volume Forecast In 2013, the Indian electricity market is forecast to have a volume of 1,108.5 TWh, an increase of 34.1% since 2008. Market Segmentation I Industrial sales dominated the Indian electricity market in 2008, generating 59% of the market's overall revenues. Market Segmentation II India accounts for 18.1% of the Asia-Pacific electricity market's value. Market Share National Thermal Power Corporation (NTPC) accounts for 22.7% of the Indian electricity market's volume.

India - Electricity Datamonitor (Published October 2009) Page 3

CONTENTS

TABLE OF CONTENTS

EXECUTIVE SUMMARY CHAPTER 1

1.1 1.2 1.3

3 7
7 7 8

Market Overview

Market Definition Research Highlights Market Analysis

CHAPTER 2 CHAPTER 3 CHAPTER 4 CHAPTER 5 CHAPTER 6 CHAPTER 7

7.1 7.2 7.3 7.4 7.5 7.6 Summary Buyer Power

Market Value Market Volume Market Segmentation I Market Segmentation II Market Share Five Forces Analysis

9 10 11 12 13 14
14 15 17 18 19 20

Supplier Power New Entrants Substitutes Rivalry

India - Electricity Datamonitor (Published October 2009) Page 4

CONTENTS

CHAPTER 8
8.1 8.2 8.3

Leading Companies

21
21 26 29

National Thermal Power Corporation (NTPC) Tata Power Company Limited Reliance Infrastructure

CHAPTER 9
9.1 9.2

Market Forecasts

30
30 31

Market Value Forecast Market Volume Forecast

CHAPTER 10 CHAPTER 11
11.1 Methodology

Macroeconomic Indicators Appendix

32 34
34 35 35

11.2 Industry Associations 11.3 Related Datamonitor Research

India - Electricity Datamonitor (Published October 2009) Page 5

CONTENTS

LIST OF TABLES
Table 1: Table 2: Table 3: Table 4: Table 5: Table 6: Table 7: Table 8: Table 9: Table 10: Table 11: Table 12: Table 13: Table 14: Table 15: Table 16: India Electricity Market Value: $ billion, 2004-2008.............................................9 India Electricity Market Volume: TWh, 2004-2008 ............................................10 India Electricity Market Segmentation I: % Share, by Value, 2008....................11 India Electricity Market Segmentation II: % Share, by Value, 2008...................12 India Electricity Market Share: % Share, by Volume, 2008 ...............................13 Key Facts: National Thermal Power Corporation (NTPC) .................................21 Key Financials: National Thermal Power Corporation (NTPC)..........................25 Key Facts: Tata Power Company Limited .........................................................26 Key Financials: Tata Power Company Limited..................................................28 Key Facts: Reliance Infrastructure ....................................................................29 India Electricity Market Value Forecast: $ billion, 2008-2013 ............................30 India Electricity Market Volume Forecast: TWh, 2008-2013 .............................31 India Size of Population (million) , 2004-2008...................................................32 India GDP (Constant 2000 Prices, $ billion), 2004-2008...................................32 India Inflation, 2004-2008 .................................................................................32 India Exchange Rate, 2004-2008 .....................................................................33

India - Electricity Datamonitor (Published October 2009) Page 6

MARKET OVERVIEW

CHAPTER 1

MARKET OVERVIEW

1.1

Market Definition
The electricity market consists of the sale of electricity to industrial, commercial, household, transportation, and other end-users, including agricultural users. The volume of the market is calculated as the total amount of electrical energy consumed in TWh, and the market value has been calculated according to average annual electricity prices. Any currency conversions used in the creation of this report have been calculated using constant 2008 annual average exchange rates. Note that in this profile, the units of energy are Watt-hours (Wh). Power (the rate at which energy is generated or consumed) is measured in units of Watts (W). To deal with wide ranges of values, it also uses the standard multipliers: kilo (k) = 1,000; mega (M) = 1,000,000; giga (G) = 1,000,000,000; and tera (T) = 1,000,000,000,000. For example, 1 TWh is identical to 1 billion kWh. For the purpose of this report Asia-Pacific is deemed to comprise of Australia, China, Japan, India, Singapore, South Korea and Taiwan.

1.2

Research Highlights
The Indian electricity market generated total revenues of $115.2 billion in 2008, representing a compound annual growth rate (CAGR) of 20.7% for the period spanning 2004-2008. Industrial sales proved the most lucrative for the Indian electricity market in 2008, generating total revenues of $67.9 billion, equivalent to 59% of the market's overall value. The performance of the market is forecast to decelerate, with an anticipated CAGR of 11.5% for the five-year period 2008-2013, which is expected to drive the market to a value of $198.3 billion by the end of 2013.

India - Electricity Datamonitor (Published October 2009) Page 7

MARKET OVERVIEW

1.3

Market Analysis
The Indian electricity market posted very healthy rates of growth over the past five years, reaching 26.9% in 2008. This growth rate is set to slow down over the forecast period. The Indian electricity market generated total revenues of $115.2 billion in 2008, representing a compound annual growth rate (CAGR) of 20.7% for the period spanning 2004-2008. In comparison, the Chinese and Japanese markets grew with CAGRs of 17.8% and 3.5% respectively, over the same period, to reach respective values of $263.3 billion and $178.7 billion in 2008. Market consumption volumes increased with a CAGR of 8.9% between 2004-2008, to reach a total of 826.7 TWh in 2008. The market's volume is expected to rise to 1,108.5 TWh by the end of 2013, representing a CAGR of 6% for the 2008-2013 period. Industrial sales proved the most lucrative for the Indian electricity market in 2008, generating total revenues of $67.9 billion, equivalent to 59% of the market's overall value. In comparison, residential sales generated revenues of $11.9 billion in 2008, equating to 10.3% of the market's aggregate revenues. The performance of the market is forecast to decelerate, with an anticipated CAGR of 11.5% for the five-year period 2008-2013, which is expected to drive the market to a value of $198.3 billion by the end of 2013. Comparatively, the Chinese and Japanese markets will grow with CAGRs of 7.2% and 5.7% respectively, over the same period, to reach respective values of $372.8 billion and $235.9 billion in 2013.

India - Electricity Datamonitor (Published October 2009) Page 8

MARKET VALUE

CHAPTER 2

MARKET VALUE

The Indian electricity market grew by 26.9% in 2008 to reach a value of $115.2 billion. The compound annual growth rate of the market in the period 2004-2008 was 20.7%. Table 1: Year 2004 2005 2006 2007 2008 CAGR, 2004-2008:
Source: Datamonitor

India Electricity Market Value: $ billion, 2004-2008 $ billion 54.3 64.9 76.9 90.7 115.2 INR billion 2,377.6 2,844.8 3,371.1 3,975.6 5,045.5 % Growth

19.70% 18.50% 17.90% 26.90% 20.7%

DATAMONITOR

Figure 1:

India Electricity Market Value: $ billion, 2004-2008

$ billion 140 120 100 $ billion 80 60 40 20 0 2004 2005 2006

% Growth 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 2007 2008 % Growth

Source: Datamonitor

DATAMONITOR

India - Electricity Datamonitor (Published October 2009) Page 9

MARKET VOLUME

CHAPTER 3

MARKET VOLUME

The Indian electricity market grew by 16.4% in 2008 to reach a volume of 826.7 TWh. The compound annual growth rate of the market volume in the period 2004-2008 was 8.9%. Table 2: Year 2004 2005 2006 2007 2008 CAGR, 2004-2008:
Source: Datamonitor

India Electricity Market Volume: TWh, 2004-2008 TWh 587.9 625.8 666.5 710.3 826.7 % Growth

6.40% 6.50% 6.60% 16.40% 8.9%

DATAMONITOR

Figure 2:

India Electricity Market Volume: TWh, 2004-2008

TWh 900 800 700 600 500 400 300 200 100 0 2004 2005 2006 TWh

% Growth 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 2007 2008 % Growth

Source: Datamonitor

DATAMONITOR

India - Electricity Datamonitor (Published October 2009) Page 10

MARKET SEGMENTATION I

CHAPTER 4

MARKET SEGMENTATION I

Industrial sales dominated the Indian electricity market in 2008, generating 59% of the market's overall revenues. Residential sales generated 10.3% of the market's aggregate revenues. Table 3: Category Industrial Residential Commercial Transportation Other Total
Source: Datamonitor

India Electricity Market Segmentation I: % Share, by Value, 2008 % Share 59.00% 10.30% 8.40% 1.80% 20.50% 100.0%
DATAMONITOR

Figure 3:

India Electricity Market Segmentation I: % Share, by Value, 2008

Other 20.5%

Transportation 1.8% Commercial 8.4% Industrial 59%

Residential 10.3%

Source: Datamonitor

DATAMONITOR

India - Electricity Datamonitor (Published October 2009) Page 11

MARKET SEGMENTATION II

CHAPTER 5

MARKET SEGMENTATION II

India accounts for 18.1% of the Asia-Pacific electricity market's value. In comparison, China accounts for 41.5% of the regional market's value. Table 4: India Electricity Market Segmentation II: % Share, by Value, 2008 Geography China Japan India Rest of Asia-Pacific South Korea Total
Source: Datamonitor

% Share 41.50% 28.10% 18.10% 7.40% 4.90% 100.0%

DATAMONITOR

Figure 4:

India Electricity Market Segmentation II: % Share, by Value, 2008

Rest of AsiaPacific 7.4% India 18.1%

South Korea 4.9%

China 41.5%

Japan 28.1%

Source: Datamonitor

DATAMONITOR

India - Electricity Datamonitor (Published October 2009) Page 12

MARKET SHARE

CHAPTER 6

MARKET SHARE

National Thermal Power Corporation (NTPC) accounts for 22.7% of the Indian electricity market's volume. Tata Power Company Limited accounts for a further 4.2% of the market's volume. Table 5: Company National Thermal Power Corporation (NTPC) Tata Power Company Limited Reliance Infrastructure Limited Other Total
Source: Datamonitor

India Electricity Market Share: % Share, by Volume, 2008 % Share 22.70% 4.20% 3.70% 69.40% 100.0%
DATAMONITOR

Figure 5:

India Electricity Market Share: % Share, by Volume, 2008

National Thermal Pow er Corporation (NTPC) 22.7% Tata Pow er Company Limited 4.2%

Other 69.4%

Reliance Infrastructure Limited 3.7%

DATAMONITOR

Source: Datamonitor

India - Electricity Datamonitor (Published October 2009) Page 13

FIVE FORCES ANALYSIS

CHAPTER 7

FIVE FORCES ANALYSIS

The electricity market will be analyzed taking electricity retailers as players. The key buyers will be taken as industrial, commercial and individual consumers, and suppliers of wholesale electricity or primary energy sources as the key suppliers.

7.1

Summary
Figure 6: Forces Driving Competition in the Electricity Market in India, 2008
Buyer Pow er 5 4
Weak Strong

Intensity of competition

3 2 1 0 Supplier Pow er

Degree of Rivalry

Threat of Substitutes

New Entrants

Score for each force is mean of scores for its drivers. Total area & color indicates intensity of competition overall. Source: Datamonitor
DATAMONITOR

Despite taking the first steps of liberalization, the Indian market continues to be dominated by regional electricity boards and customers can rarely choose their supplier. As most of the electricity retailers in India are also involved in power generation, primary energy sources, such as coal, are key inputs. These tend to be available from just a few large companies. For example, India's domestic coal industry is a state-owned monopoly. This boosts supplier power. Other major suppliers to Indian electricity market are companies offering outsourcing activities. A wide variety of business activities are outsourced by electricity suppliers including construction, civil engineering and administrative functions. The Electricity Act of 2003 was introduced to encourage competition in the market and has allowed private companies to enter both upstream and downstream. Rising demand and startling growth makes the market attractive to new entrants. For industrial users, autogeneration is a substitute for buying electricity from retailers. The initial switching costs include the amount invested in power generation plant in an industrial user's facilities, which may be non-negligible.

India - Electricity Datamonitor (Published October 2009) Page 14

FIVE FORCES ANALYSIS

7.2

Buyer Power
Figure 7: Drivers of Buyer Power in the Electricity Market in India, 2008

Strength of buyer power

Weak

Strong

Buyer size 5 4 3 2 1 0 Oligopsony threat

Product dispensability

Buyer independence

Low -cost sw itching

Backw ards integration

Undifferentiated product

Financial muscle Price sensitivity

Tendency to sw itch

Scores: 1= weak driver...5=strong driver Source: Datamonitor

DATAMONITOR

In the Indian electricity market, the industrial segment is by far the most lucrative however the residential domain also represents a significant area of operation. The majority of electricity is supplied by regional electricity boards and customers can rarely choose their supplier. The 2003 Electricity Act was aimed at paving the way towards a liberalised electricity market, aligning India with a variety of other countries moving gradually in this direction. The depth and scope of this shift is yet to be fully determined with the process currently ongoing. The widespread trend towards deregulation globally offers useful indicators of what may lie ahead for the country. The opening up of such markets to private investors, it is generally maintained, introduces a level of rivalry that can yield more competitive rates for buyers and the freedom to move between suppliers. Residential consumers in most countries have yet to experience the scale of empowerment that large scale, industrial consumers have achieved in this respect however many buyers do now have the option to switch between companies. With electricity, by nature, being a uniform product there exists minimal opportunity for intrinsic differentiation and price is paramount.

India - Electricity Datamonitor (Published October 2009) Page 15

FIVE FORCES ANALYSIS

Whilst this, in principle, strengthens the hand of buyers it should be noted that this new found freedom is accompanied by an inevitable increase in marketing and temporary incentive schemes by the players who offer such opportunities. As a consequence, billing now reflects this company cost. The rise of consumer awareness and comparison services constrains this upward pressure yet the heavy contemporary dependence on electricity is well recognised. With a steady flow of new domestic appliances sustaining the surge in demand and severe limitations to current substitutes, consumers are reliant on this vital resource. This basic dependency strengthens the standing of electricity companies as an informal bloc and exposes customers to price rises. These developments will continue to shape the strength of buyers globally. In India, buyers currently remain weak.

India - Electricity Datamonitor (Published October 2009) Page 16

FIVE FORCES ANALYSIS

7.3

Supplier Power
Figure 8: Drivers of Supplier Power in the Electricity Market in India, 2008

Strength of supplier power

Weak

Strong

Forw ard integration

Differentiated input

Supplier size 5 4 3 2 1 0

Oligopoly threat

Sw itching costs

Importance of quality/cost No substitute inputs

Player independence Player dispensability

Scores: 1= weak driver...5=strong driver

Source: Datamonitor
DATAMONITOR

As most of the electricity retailers in India are also involved in power generation, primary energy sources, such as coal, are key inputs. These tend to be available from just a few large companies - for example, India's domestic coal industry is a stateowned monopoly. This boosts supplier power. Other major suppliers to Indian electricity market are companies offering outsourcing activities. A wide variety of business activities are outsourced by electricity suppliers including construction, civil engineering and administrative functions. The government's intention to increase hydroelectric generation is likely to raise demand for construction services going forward. Such activities are generally provided under fixed term contract by suppliers providing them a degree of power by increasing switching costs for electricity companies. In principle, market players can find substitute raw materials by varying the primary energy mix they use for generation, but switching completely between one fuel and another would require additional power stations to be built - a costly and expensive process. Overall, supplier power is moderate.

India - Electricity Datamonitor (Published October 2009) Page 17

FIVE FORCES ANALYSIS

7.4

New Entrants
Figure 9: Factors Influencing the Likelihood of New Entrants in the Electricity Market in India, 2008

Likelihood of new entrants

Weak

Low -cost sw itching 5 Market grow th Undifferentiated product 4 3 Weak brands Scale unimportant 2 1 0 Little IP involved Low fixed costs
Strong

Suppliers accessible Distribution accessible

Little regulation Incumbents acquiescent

Scores: 1= weak driver...5=strong driver

Source: Datamonitor
DATAMONITOR

The Indian electricity market is presently dominated by regional electricity boards however with the introduction of the Electricity Act in 2003 the emergence of competition has been sanctioned in the market, allowing private companies to enter both upstream and downstream. Rising demand and exceptional growth makes the market attractive to new entrants. Whilst intrinsic differentiation is impossible with a commodity like electricity, a company does have the opportunity to sharply distinguish itself from rivals by establishing a recognised standard of service. In a country blighted by power shortages, poor coverage, and blackouts, the stability of supply is highly significant. Many new entrants will be involved in power generation, and this implies substantial up-front investment and high fixed costs, restricting entry to large players with significant financial muscle. Overall, there is a moderate likelihood of new entrants.

India - Electricity Datamonitor (Published October 2009) Page 18

FIVE FORCES ANALYSIS

7.5

Substitutes
Figure 10: Factors Influencing the Threat of Substitutes in the Electricity Market in India, 2008

Threat of substitutes

Weak

Low -cost sw itching 5

Strong

4 3 2 1 0

Beneficial alternative

Cheap alternative

Scores: 1= weak driver...5=strong driver Source: Datamonitor

DATAMONITOR

For some industrial users, autogeneration offers a viable substitute to buying electricity from retailers. Customers may opt to install their own power generating plant, although the investment required for this may involve substantial switching costs. The effective price of this substitute can be viewed through the difference between the running cost of autogeneration (mainly fuel, unless renewables are used) and the industrial retail tariff - while some correlation between primary energy prices and this tariff is likely, predicting the effective price is not easy because energy prices can be volatile. Companies may be encouraged to opt for autogeneration by the ability to sell their surplus power back to the national grid. Overall, the threat of substitutes is moderate.

India - Electricity Datamonitor (Published October 2009) Page 19

FIVE FORCES ANALYSIS

7.6

Rivalry
Figure 11: Drivers of Degree of Rivalry in the Electricity Market in India, 2008

Degree of rivalry

Weak

Competitor size 5 Zero-sum game? Number of players 4 3 Storage costs Low -cost sw itching 2 1 0 Similarity of players Undifferentiated product
Strong

Lack of diversity Hard to exit

Low fixed costs Easy to expand

Scores: 1= weak driver...5=strong driver Source: Datamonitor

DATAMONITOR

At present, there is a legislative framework in place for liberalizing the Indian electricity market, with the potential for competition both upstream and downstream. However, in practise, the competitive landscape has yet to deepen considerably. End-users have little choice of supplier in many places. A small number of state electricity boards dominate. Companies do, however, face high fixed costs, with substantial exit barriers blocking withdrawal from the market. Asset heavy companies are committed, therefore, to a certain scale of operation. Yet with the market displaying exceptional growth, companies are unlikely to be pushed into aggressive, head-to head competition even where liberalisation is advanced. Rivalry is no more than moderate.

India - Electricity Datamonitor (Published October 2009) Page 20

LEADING COMPANIES

CHAPTER 8

LEADING COMPANIES

8.1

National Thermal Power Corporation (NTPC)

Table 6: Address: Telephone: Fax: Website: Financial Year-End: Ticker: Stock Exchange:
Source: Company Website

Key Facts: National Thermal Power Corporation (NTPC) NTPC Bhawan, SCOPE Complex, 7 Institutional Area, Lodhi Road, New Delhi 110 003, India 91 11 2436 0100 91 11 2436 1018 www.ntpc.co.in March NTPC, 532555 National Stock Exchange, Bombay Stock Exchange
DATAMONITOR

National Thermal Power Corporation (NTPC) is the largest thermal power generating company of India. NTPC's core business is power generation. It is also involved in the engineering, construction, and operation of power generating plants. In addition, the company is engaged in consultancy, power trading, ash utilization, and coal mining operations. The Government of India holds 89.5% of the total equity of the company, and the balance is held by institutional investors and the public. The company primarily operates in India. NTPC operates through two segments: generation and other business. The generation segment of NTPC has an installed capacity of 29,394 MW through its 15 coal-based power plants (23,395 MW), seven gas-based power plants (3,955 MW), and four joint venture projects (2,044 MW) as of March 31, 2008. The company is planning to invest in three hydro-based power plants with an approved installed capacity of 1,920 MW. Coal and natural gas are the primary fuels for power generation for NTPC. The company also uses oil as a secondary fuel for its coal-fired plants and naphtha as an alternate fuel in its gas-fired plants. It has also diversified into hydro power, coal mining, power equipment manufacturing, oil and gas exploration, power trading, and distribution. The other business segment of NTPC provides consultancy services in engineering, project management, construction management, and operation and maintenance of power plants to clients within as well as outside India.

India - Electricity Datamonitor (Published October 2009) Page 21

LEADING COMPANIES
The segment undertakes consultancy and turnkey project contracts for domestic and international clients in the different phases of power plants; namely, construction supervision, project management, inspection services, and operation and maintenance of various power utilities. NTPC is registered as a consultant with several leading international development and financial institutions such as The World Bank, The Asian Development Bank, the African Development Bank, and United Nations Development Program (UNDP). NTPC has a number of subsidiaries. These include: NTPC Electric Supply Company, NTPC Vidyut Vyapar Nigam, NTPC Hydro, Pipavav Power Development Company, and Kanti Bijlee Utpadan Nigam. NTPC Electric Supply Company (NESCL) is involved in the execution of work on turnkey basis under the Indian government's rural electrification program called Rajiv Gandhi Grameen Vidyuti-Karan Yojana in five states, namely, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, and West Bengal; and the Union Territory of Lakshadweep. The company has also been entrusted with rural electrification work by the Kerala Government and has received approval for a joint venture with Kerala Industrial Infrastructure Development Corporation (KINFRA) for acquiring the business of retail distribution of electricity in various industrial parks being developed by KINFRA in state of Kerala. The company acts as 'Advisor-cum-consultant' for the Indian Ministry of Power for the implementation of schemes under the Accelerated Power Development and Reforms Program (APDRP). NESCL renders services for post-award project monitoring and supervision of work quality for projects executed by state utilities in Uttrakhand, Madhya Pradesh, and Karnataka. The company also assists the electricity distribution companies (DISCOMs) and utilities in enhancement and implementing the sectoral reform process, and has been participating in the distribution infrastructure development program under consultancy assignments. NTPC Vidyut Vyapar Nigam (NVVN) was formed to trade in electric power. During the fiscal year 2007, the company transacted business with various state electricity boards nationwide, and traded 3.324 billion units of electricity in FY2008 in comparison to 2.664 billion units traded in FY2007. NVVN is also engaged in facilitating development of power exchange in India. NTPC Hydro's (NHL) objective is to develop small and medium hydro electric power projects up to 250 MW. Presently the company is implementing the following projects: Lata Tapovan Hydro Electric Project (171 MW) in the state of Uttrakhand; and Rammam-III (120 MW) in the state of West Bengal.

India - Electricity Datamonitor (Published October 2009) Page 22

LEADING COMPANIES
Pipavav Power Development Company (PPDCL) was set up by NTPC in collaboration with Gujarat Power Corporation (GPCL) and Gujarat Electricity Board (GEB) to build a 1,000 MW thermal power project at Pipavav in Gujarat. However, NTPC dissociated from Pipavav Power Project in May 2007 after obtaining approval of Ministry of Power as it was decided by the Gujarat Government that the project would be developed based on imported coal or any other suitable fuel in collaboration with a strategic partner on a fast track basis. Kanti Bijlee Utpadan Nigam (formerly known as Vaishali Power Generating Company) has been incorporated with Bihar State Electricity Board as per the decision of Government of India to take over Muzaffarpur Thermal Power Station (2 x 110 MW). NTPC contributed 51% of the equity, the balance was contributed by Bihar State Electricity Board and its nominees. NTPC is to renovate and run the plant. NTPC also has several joint ventures with a number of companies. These include: PTC India, Utility Powertech, NTPC - SAIL Power Company, NTPC - ALSTOM Power Services, NTPC Tamil Nadu Energy Company, Ratnagiri Gas and Power, Aravali Power Company, and NTPC-SCCL Global Venture. The main objectives of PTC India (PTC) include trading and import/export of power, and purchase of power from private power projects and selling it to state electricity boards and others. The company has 5.28% equity contribution each from NTPC, the electricity distribution company Power Grid Corporation of India, the financial institution Power Finance Corporation, and the hydroelectric power generation company National Hydroelectric Power Corporation (NHPC), while the balance is from hydroelectric power generator Damodar Valley Corporation, financial institutions, banks, and general public. PTC has traded a total 9.889 billion units (BUs) in FY2008 as compared with 9.549 BUs in the previous financial year. Utility Powertech (UPL) is a 50:50 joint venture Company of NTPC and Indian private utility company Reliance Energy formed to take up assignments of construction, erection, and supervision in power sector and other sectors in India and abroad. NTPC - SAIL Power Company (NSPCL) owns and operates a capacity of 314 MW as captive power plants for steel manufacturer Steel Authority of India's (SAIL) steel manufacturing facilities located at Durgapur (West Bengal), Rourkela (Orissa), and Bhilai (Chattisgarh), in India. These power plants generated a total of 2.576 BUs in FY2008 as compared with 2.503 BUs during the corresponding previous year. The company has been implementing the expansion of power plant at Bhilai by adding two 250 MW units. NTPC - ALSTOM Power Services (NASL) is a joint venture company with equal equity contribution from NTPC and utility company Alstom Power Generation of Germany. NASL has been formed for taking up renovation and modernization assignments of power plants both in India and abroad.

India - Electricity Datamonitor (Published October 2009) Page 23

LEADING COMPANIES
NTPC Tamil Nadu Energy Company is a joint venture between NTPC and Tamil Nadu Electricity Board to set up a coal-based power station of 1,000MW capacity, at Vallur Thermal Power Project (Tamil Nadu) in India, using Ennore port infrastructure facilities. Ratnagiri Gas and Power is a joint venture between NTPC, the utility company Gas Authority of India (GAIL), Maharashtra State Electricity Board, and Indian financial institutions. NTPC has a stake of 28.33% for taking over and operating the gas-based Dabhol Power Project located in Maharashtra, India. However, NTPC's shareholding in Ratnagiri Gas and Power is to be revised to 32.88%. Aravali Power Company is another joint venture. NTPC owns 50% of the equity, and the remainder is shared equally between Haryana Power Generation Corporation, which is owned by the state of Haryana, and Indraprastha Power Generation Company, which is owned by the government of the national capital territory (NCT) of Delhi. Aravali Power Company is setting up a coal fired power plant, the Aravali Super Thermal Power Project of 1500 MW (3x500 MW), in Jhajjar District of Haryana. The project is being set up by NTPC on concept-to-commissioning basis. NTPC would also operate and maintain the station on management contract basis for at least 25 years. NTPC-SCCL Global Venture was formed as a joint venture with Singareni Collieries Company (SCCL) to develop, operate and maintain coal blocks and integrated coalbased power projects in India and abroad.

India - Electricity Datamonitor (Published October 2009) Page 24

LEADING COMPANIES
Key Metrics The company recorded revenues of INR400,177million (approximately $9,133.4 million) in the financial year ended March 2008 (FY2008), an increase of 22.6% over the financial year ended March 2007 (FY2007). The operating profit of the company was INR123,275 million (approximately $3,062.2 million) in FY2008, an increase of 14.6% over FY2007. The net profit was INR74,148 million (approximately $1,692.3 million) in FY2008, an increase of 8% over FY2007. Table 7: Key Financials: National Thermal Power Corporation (NTPC)
2004 4,302.7 1,200.7 27.9% 11,763.4 3,649.6 2005 5,367.2 1,330.3 24.8% 13,511.9 3,977.1 2006 6,100.5 1,328.4 21.8% 14,971.5 4,704.1 2007 7,447.7 1,566.8 21.0% 16,829.6 5,738.1 2008 9,133.4 1,692.3 18.5% 18,591.6 6,577.6

Revenues Net Income Profit Margin Total Assets Total Liabilities

All in $ millions, except for margins Source: Company Filings

DATAMONITOR

Figure 12:

Revenues & Profitability: National Thermal Power Corporation (NTPC)

Revenues Net Income Profit Margin 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 2004 2005 2006 Year 2007 2008 Profit Margin (%)

10,000.0 9,000.0 8,000.0 7,000.0 6,000.0 5,000.0 4,000.0 3,000.0 2,000.0 1,000.0 0.0

Source: Company Filings

US$ Millions

DATAMONITOR

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LEADING COMPANIES

8.2

Tata Power Company Limited

Table 8: Address: Telephone: Fax: Website: Financial Year-End: Ticker: Stock Exchange:
Source: Company Website

Key Facts: Tata Power Company Limited Bombay House, 24 Homi Mody Street, Mumbai - 400 001, India 91 22 5665 8282 91 22 5665 8801 www.tatapower.com December 500400 Bombay Stock Exchange
DATAMONITOR

Tata Power Company (Tata Power) is an India-based company engaged in the business of generation, transmission and distribution of electricity with operations in the states of Maharashtra, Jharkhand and Karnataka. The company's operations are divided into two business segments: power; and other. The power segment is engaged in generation, transmission and distribution of electricity. In the generation business, Tata Power has an installed power generation capacity of 2,300 MW, with the Mumbai power business, which has a unique mix of thermal and hydro power, generated at the thermal power station, Trombay, and the hydro electric power stations at Bhira, Bhivpuri and Khopoli, accounting for 1,797 MW. In the transmission business, the company owns and operates 1,200 circuit km of HT (220 kV and 110 kV) transmission network. The company has a 51% stake in the 1,200 km Tala Transmission project, a joint venture with the Power Grid Corporation of India. The joint venture company named Powerlinks Transmission Limited evacuates power from the Tala Hydro Project in Bhutan and to carry surplus electricity from the North Eastern States to the Northern Indian belt. In the distribution business, Tata Power has a 935 km HT and LT cable distribution network connecting 17 major receiving stations and over 85 sub-stations in its Mumbai License area. With the privatization of Delhi Vidyut Board (DVB), Tata Power Company holds managing control in the distribution company North Delhi Power (NDPL). NDPL distributes and supplies power to the North-North West areas of Delhi. The company's other segment includes electronic equipment, broadband services, oil exploration and research and development.

India - Electricity Datamonitor (Published October 2009) Page 26

LEADING COMPANIES
In the broadband and communication services, the company capitalizes on its existing technical expertise in fiber optic communications and data acquisition to establish a leadership position as a provider of a state-of-the-art communications infrastructure. The company operates as a "carrier of carriers" that provides a backbone for communication network to third parties. Tata Power's Broadband Division (TPBB), is credited with offering India's first DWDM (Dense Wave Division Multiplexing) network and first Gigabit switched IP network, has also launched MPLS (Multi Protocol Label Switching) services. Tata Power is involved in the oil exploration and production business. Tata Petrodyne, a 100% subsidiary of Tata Power, is in a consortium with a number of oil and gas companies for the exploration of oil and gas. In the research and development segment, the Strategic Electronics Division of Tata Power pursues development and production activities for the defense sector. This operation is supported by a full-fledged Department of Science and Technology recognized design and development center in Mumbai and a manufacturing facility in Bangalore.

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LEADING COMPANIES
Key Metrics The company recorded revenues of INR 175,750 million (approximately $2,485.7 million) in the fiscal year ended March 2009, an increase of 105.2% over 2008. The company's operating profit was INR 24,638.3 million (approximately $562.3 million) in fiscal 2009, an increase of 58.6% compared to 2008. Its net profit was INR 12,187.4 million (approximately $240.8 million) in fiscal 2009, an increase of 51.4% over 2008. Table 9: Key Financials: Tata Power Company Limited
2004 1,005.7 120.2 12.0% 1,545.6 392.9 2005 990.3 125.8 12.7% 1,825.1 652.8 2006 1,129.0 139.3 12.3% 1,896.8 628.8 2007 1,211.3 159.0 13.1% 2,206.2 829.2 2008 2,485.7 240.8 9.7% 3,148.7 1,773.9

Revenues Net Income Profit Margin Total Assets Total Liabilities

All in $ millions, except for margins Source: Company Filings

DATAMONITOR

Figure 13:

Revenues & Profitability: Tata Power Company Limited

Revenues Net Income Profit Margin 14.0% 12.0% 10.0% 8.0% Profit Margin (%)

3,000.0 2,500.0 US$ Millions 2,000.0 1,500.0

6.0% 1,000.0 500.0 0.0 2004 2005 2006 Year 2007 2008 4.0% 2.0% 0.0%

Source: Company Filings

DATAMONITOR

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LEADING COMPANIES

8.3

Reliance Infrastructure
Table 10: Key Facts: Reliance Infrastructure Reliance Energy Centre, Santa Cruz (E), Mumbai 400 055, Maharashtra, IND 91 22 3009 9999 91 22 3009 9536 www.rel.co.in; www.rinfra.com March 500390, RELINFRA Bombay, National Stock Exchange of India
DATAMONITOR

Address: Telephone: Fax: Website: Financial Year-End: Ticker: Stock Exchange:

Source: Company Website

Reliance Infrastructure, which changed its name from Reliance Energy in April 2008, is one of Indias leading private sector utilities, and part of the Reliance - Anil Dhirubhai Ambani Group. It is engaged in the generation, trading, transmission, and distribution of electricity. Reliance Infrastructure has some 30 million customers, in Mumbai, Delhi, and elsewhere in India. It has a generating capacity of 941 MW, with power plants located in Maharashtra, Andhra Pradesh, Kerala, Karnataka and Goa. It is also developing gas, coal, wind, and hydroelectric generation plants in Maharashtra, Uttar Pradesh, Arunachal Pradesh and Uttaranchal. These will have a total generating capacity of 13.51 GW when completed. Other business activities include investment in road and rail projects. Key Metrics Reliance Infrastructure generated revenues of $1,712 million in the financial year ended March 2008, an increase of 14.1% compared to the previous year. The company's net income totaled $247.6 million in fiscal 2008, an increase of 35.5% compared with 2007.

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MARKET FORECASTS

CHAPTER 9

MARKET FORECASTS

9.1

Market Value Forecast

In 2013, the Indian electricity market is forecast to have a value of $198.3 billion, an increase of 72.2% since 2008. The compound annual growth rate of the market in the period 2008-2013 is predicted to be 11.5%. Table 11: Year 2008 2009 2010 2011 2012 2013 CAGR, 2008-2013:
Source: Datamonitor

India Electricity Market Value Forecast: $ billion, 2008-2013 $ billion 115.2 136.8 153.4 167.7 182.3 198.3 INR billion 5,045.5 5,991.8 6,721.9 7,349.1 7,989.4 8,688.3 % Growth 26.90% 18.80% 12.20% 9.30% 8.70% 8.70% 11.5%
DATAMONITOR

Figure 14:

India Electricity Market Value Forecast: $ billion, 2008-2013

$ billion 250 200 $ billion 150 100 50 0 2008 2009 2010 2011

% Growth 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 2012 2013 % Growth

Source: Datamonitor

DATAMONITOR

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MARKET FORECASTS

9.2

Market Volume Forecast

In 2013, the Indian electricity market is forecast to have a volume of 1,108.5 TWh, an increase of 34.1% since 2008. The compound annual growth rate of the market volume in the period 2008-2013 is predicted to be 6%. Table 12: Year 2008 2009 2010 2011 2012 2013 CAGR, 2008-2013:
Source: Datamonitor

India Electricity Market Volume Forecast: TWh, 2008-2013 TWh 826.7 918.9 983.1 1,027.3 1,069.4 1,108.5 % Growth 16.40% 11.20% 7.00% 4.50% 4.10% 3.70% 6.0%
DATAMONITOR

Figure 15:

India Electricity Market Volume Forecast: TWh, 2008-2013

TWh 1,200 1,000 800 TWh 600 400 200 0 2008 2009 2010 2011

% Growth 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 2012 2013 % Growth

Source: Datamonitor

DATAMONITOR

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MACROECONOMIC INDICATORS

CHAPTER 10 MACROECONOMIC INDICATORS

Table 13: Year 2004 2005 2006 2007 2008 India Size of Population (million) , 2004-2008 Population (million) 1075.5 1093.6 1111.7 1129.9 1148.0 % Growth

1.70% 1.70% 1.60% 1.60%

Source: Datamonitor

DATAMONITOR

Table 14:

India GDP (Constant 2000 Prices, $ billion), 2004-2008 Constant 2000 Prices, $ billion 593.9 647.5 708.1 772.6 832.1

Year 2004 2005 2006 2007 2008

% Growth

9.00% 9.40% 9.10% 7.70%

Source: Datamonitor

DATAMONITOR

Table 15: Year 2004 2005 2006 2007 2008

India Inflation, 2004-2008 Inflation Rate (%) 2.7 3.3 6.9 8.1 9.2 % Growth

19.00% 111.30% 16.90% 13.50%

Source: Datamonitor

DATAMONITOR

India - Electricity Datamonitor (Published October 2009) Page 32

MACROECONOMIC INDICATORS
Table 16: India Exchange Rate, 2004-2008 Exchange Rate ($/INR) 0.02206 0.02267 0.02207 0.02418 0.02282

Year 2004 2005 2006 2007 2008

Source: Datamonitor

DATAMONITOR

India - Electricity Datamonitor (Published October 2009) Page 33

APPENDIX

CHAPTER 11

APPENDIX

11.1 Methodology
Datamonitor Industry Profiles draw on extensive primary and secondary research, all aggregated, analyzed, and cross-checked and presented in a consistent and accessible style. Review of in-house databases Created using 250,000+ industry interviews and consumer surveys and supported by analysis from industry experts using highly complex modeling & forecasting tools, Datamonitors in-house databases provide the foundation for all related industry profiles Preparatory research We also maintain extensive in-house databases of news, analyst commentary, company profiles and macroeconomic & demographic information, which enable our researchers to build an accurate market overview Definitions Market definitions are standardized to allow comparison from country to country. The parameters of each definition are carefully reviewed at the start of the research process to ensure they match the requirements of both the market and our clients Extensive secondary research activities ensure we are always fully up-to-date with the latest industry events and trends Datamonitor aggregates and analyzes a number of secondary information sources, including: National/Governmental statistics International data (official international sources) National and International trade associations Broker and analyst reports Company Annual Reports Business information libraries and databases Modeling & forecasting tools Datamonitor has developed powerful tools that allow quantitative and qualitative data to be combined with related macroeconomic and demographic drivers to create market models and forecasts, which can then be refined according to specific competitive, regulatory and demand-related factors Continuous quality control ensures that our processes and profiles remain focused, accurate and up-to-date

India - Electricity Datamonitor (Published October 2009) Page 34

APPENDIX

11.2 Industry Associations

The Federation of Asian and Pacific Electrical Contractors Associations 533 2-Deung-Chon-2 Dong, Gang-Seo-Ku, Seoul, 157-718, Korea. Tel: 82 2 3219 0442/6 Fax: 82 2 3219 1459 www.fapeca.org/home.asp

11.3 Related Datamonitor Research

Datamonitor Industry Profiles Global Electricity Electricity in Europe Electricity in the United Kingdom Electricity in the United States Electricity in Japan Electricity in China Electricity in Italy Electricity in Belgium Electricity in Spain Electricity in Canada Electricity in Mexico

India - Electricity Datamonitor (Published October 2009) Page 35