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State-run NTPC looks to pick up around 5% stake in PXIL

India’s largest power generation utility NTPC Ltd is looking to acquire around 5% in Power Exchange India Ltd (PXIL), promoted by National Stock Exchange of India Ltd (NSE) and National Commodity & Derivatives Exchange Ltd (NCDEX), according to two people aware of the development.

This comes at a time when electricity prices at Indian power exchanges have spiked after a sharp depletion of coal stocks at power plants and growing demand for power.

A power exchange functions on the lines of commodity exchanges and provides a platform for buyers and sellers of electricity to enter into spot contracts for the same day, coming day and on a weekly basis up to 11 days.

Of about 1,381 billion units (BU) of electricity consumed in India, only 7% is traded on the power exchanges.

India has two power exchanges—India Energy Exchange (IEX) and PXIL. Pranurja Solution Ltd led by BSE, PTC India Ltd and ICICI Bank Ltd have been given permission by India’s apex power sector regulator Central Electricity Regulatory Commission (CERC) to start the country’s third power exchange.

“NTPC is looking to buy around 5% stake in PXIL,” said one of the persons cited above requesting anonymity.

NTPC Vidyut Vyapar Nigam Ltd (NVVN), an NTPC subsidiary, is a “trader member” of both IEX and PXIL.

According to CERC, a trading member of the power exchange can have a maximum of 5% shareholding in the power exchange. However, a non-member can own up to 25%.

PXIL managing director and chief executive officer Prabhajit Kumar Sarkar declined comment. Queries emailed to the spokespersons for NTPC, NSE and NCDEX on Tuesday evening weren’t immediately answered.

This is NTPC’s fresh attempt at getting a toehold in the Indian power exchange business after its previous plans to set up National Power Exchange didn’t fructify.

NTPC Group posted a net profit of $1.85 billion in FY21. It has also set an aim of 10% reduction in net energy intensity. The state-run company has an installed capacity of about 67 gigawatts (GW) across 70 power projects, with 18GW under construction.

It has set an ambitious target of 60GW renewable energy capacity by 2032 from the existing 4.7GW.

It plans to invest ₹1 trillion between 2019 and 2024 to become a 130GW power producer by 2032. NTPC is also preparing to list its clean energy units NTPC Renewable Energy Ltd and NVVN.

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