NTPC plans to place orders for generators worth at least $7.2 billion by March 31 as it accelerates capacity addition to help reduce blackouts

NTPC Ltd., India’s biggest power producer, plans to place orders for generators worth at least 328.5 billion rupees ($7.2 billion) by March 31 as it accelerates capacity addition to help reduce blackouts.The utility will buy nine generators of 660 megawatts each and the same number of 800-megawatt units, Chairman Arup Roy Choudhury said in an interview at his office in New Delhi Nov. 26. The equipment cost per megawatt is 25 million to 30 million rupees, he said.NTPC, which failed to meet its capacity addition target in the year ended March 31, aims to speed up construction of plants to meet demand in Asia’s second-fastest growing major economy. Capacity addition will more than double to 3,150 megawatts this year, with another 5,500 megawatts to follow in the year ending March 2012, Choudhury said.“One of the biggest concerns for NTPC has been the execution of projects,” said Harshad Shukla, an analyst at KR Choksey Shares & Securities Pvt., who has a one-year price target of 233 rupees on the stock. With the orders, “NTPC’s project execution is expected to move up,” he said.NTPC and its ventures have plants that can generate 32,694 megawatts, according to the company’s website. The utility is targeting 75,000 megawatts by March 2017.

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NTPC shares gained 1.4 percent, the most since Oct. 25, to 179.40 rupees in Mumbai trading. The stock has declined 24 percent this year compared with a 11 percent gain in the benchmarkSensitive Index.Companies that win bids to supply the equipment will need to set up local manufacturing units to avoid delays, Choudhury said. Delivery of generators must start within 16 months from the time the orders are placed, he said.NTPC may form a partnership with Nuclear Power Corp. of India to build a plant in Haryana state in the north of the country, Choudhury said. The generator may take a 49 percent stake in the venture.India is seeking investments from domestic and overseas companies to increase generation capacity after the government pledged to provide electricity to households nationwide by 2012. The country’s installed capacity was 167,278 megawatts at the end of October and the government is targeting an increase to 200,000 megawatts in two years to sustain economic growth of 8 percent, according to the power ministry.India’s economy grew at 8.8 percent in the three months ended June 30, the fastest pace in more than two years.