This Govt-Backed Stock Is Tumbling As Key Supplies Hit Critical Levels


Shares of top thermal power company NTPC were languishing in the red as the company’s coal stocks dwindled to critically low levels.

What Happened: The state-backed power company has just 8.5 days’ worth of coal at its power plants, it said in an investor and analyst call on Saturday. The government’s norms suggest there should be 20 to 26 days’ worth at non-pithead plants and 12 to 17 days’ worth at pithead plants.

NTPC’s coal stock at non-pithead stations will last about 8.5 days and even fewer at pithead stations. But the company expects the situation to improve by the end of this month due to higher production after the monsoon season.

See Also: Apple’s India Bet Pays Off, Ola’s Fire Incident And Other Stories From The Weekend You Can’t Miss

Why It Matters: This isn’t just an issue for NTPC; it’s a national problem. According to data from the Central Electricity Authority (CEA), coal stocks at domestic coal-based power plants stood at 18.6 million tonnes on October 28, close to the lowest point observed during the week starting October 23.

This situation is due to factors such as lower coal production during the monsoon, supply problems due to logistical constraints and high power demand, even at night, when renewable energy sources can’t contribute.

Take Stock Of The Week Ahead

Get all the latest Share Market trends and news to set you up for the week ahead.

You have successfully subscribed.

Current stock levels are much lower than during the peak summer months.

Price Action: NTPC’s share price was down 1.37% at ₹233.35 in early trade on Monday.

Read Next: Flipkart’s Making A Dive Back Into The Insurance World And It’s Trying To Be More Calculated This Time

Posted In: EquitiesMarketsMoversTrading IdeasNTPC