Engineering and Capital Goods - NTPC places INR60bn orders (Edelweiss pdf link)

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As per a recent news article, NTPC has placed orders worth INR60bn with Doosan Heavy Industries Ltd and JSW Toshiba Turbines Pvt. Ltd for its 2400MW (3x800MW) Kudgi project in Karnataka. Orders worth INR38bn for 3x800MW boiler sets have been placed with Doosan while orders for 3x800MW TG sets worth INR23bn have been placed with JSW Toshiba. Remaining orders will be placed with respective players once NTPC sorts out issues over land clearance.

Backdrop of the event

NTPC had planned to set up four projects of 9x 800MW at Kudgi, Lara, Darlipali and Gajmara. In September’11, Doosan emerged as the lowest bidder (L1) for its 800MW bulk tender for Super-Critical boilers while BHEL was given L2 status, meaning Doosan won five sets and BHEL won four sets in Super-Critical Boilers.  In the TG bid, BGR-Hitachi came out as L1 with four turbine generators whereas JSW Toshiba and BHEL got three and two TG sets respectively. After the financial bidding, NTPC was to award the LOI to successful bidders. However, it was unable to place Bulk orders for these projects due to issues related to acquiring land except at Kudgi (where land was already available).

Our view: Positive for BGR, BHEL

After this award, orders worth INR120bn will be placed with successful bidders of 800MW Bulk tendering. The following details the remaining LOIs that will be placed with respective companies. 

·       Doosan (INR 25 bn worth of order for 2x800MW Boiler sets

·       BHEL (INR 65 bn worth of order for 4x800MW Boiler sets & 2x800MW TG sets)

·       BGR Energy (INR 30 bn worth of order for 4x800MW TGsets)

If NTPC manages to give the remaining LOIs before 31st March 2012, it should be a big positive for BGR Energy (adding INR30bn to the current order book of INR85bn) and BHEL (addition of INR65bn to the current order book of INR1460bn).

EdelFlash: Engineering and Capital Goods - NTPC places INR60bn orders