About NTPC

NTPC (National Thermal Power Corporation Limited is a Maharashtra based public limited
PSU engaged in electrical power generation, natural gas and allied activities. It was founded
in 1975.
NTPC earned a profit of 10,243 crore in 2015 making it the largest power company in India
with a power generating capacity of around 45,548 MW and was ranked 424 th in the Forbes
Global 2000 in 2014.
The company currently employs 24,546 employees. NTPC operates form 55 locations in
India, 1 in Sri Lanka and 2 in Bangladesh.
The Company has developed a long term plan to become 128000 MW Company by the year
2032 and is on an expansion spree to meet the power requirements of the country.
As of 30, Sep. 2015, Government of India held around 74.96% equity shares in NTPC. Over
680,000 individual shareholders hold approx. 1.92% of its shares. Life Insurance Corporation
of India is the largest non-promoter shareholder in the company with 10.03% shareholding.

Awards and Recognitions:

NTPC was ranked 2nd among the 250 largest Power Producers and Energy Traders in
the world by Plattsin 2015. On overall basis NTPC ranked 56th amongst Platts 250

Companies.
In 2009, it received ICSI National Award for Excellence in Corporate Governance.
(Amount in Crore Rs.)

Year
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
Total

Dividend Paid

Profit After Tax

No. of Shares

DPS

EPS

2,886
2,968
3,133
3,133
3,298
3,710
4,741
2,061
2,762
28,694

7,415
8,201
8,728
9,103
9,224
12,619
10,975
10,291
10,243
86,799

825
825
825
825
825
825
825
825
825

3.5
3.6
3.8
3.8
4
4.5
5.75
2.5
3.35
35

8.99
9.95
10.59
11.04
11.19
15.30
13.31
12.48
12.42
105

Pay Out
Ratio
39%
36%
36%
34%
36%
29%
43%
20%
27%

Share
Price
196.6
179.85
207.25
193.1
162.75
141.95
119.9
146.85
128.85

DPS and EPS

18
16
14
12
10
8
6
4
2
0

DPS

EPS

Dividend & PAT

14,000
12,000
10,000
8,000
6,000
4,000
2,000
-

Dividend Paid

Profit After Tax

Dividend Policy Followed by NTPC:

As is evident from the data collected, NTPC stable dividend policy until 2011-12 up to which
the companys pay-out ratio was around 36%. However after 2011-12, the companys pay-out
ratio is fluctuating to a great extent. In addition to this, the dividend declared by NTPC has a
close relation with the profits earned by the company as is evident by the chart that the

companys dividend distributed is moving in the same general direction as the companys
Profit after Tax.

5 Years Dividend Pay-out Ratio:

Dividend Pay-out Ratio

50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
2011-12

2012-13

2013-14

2014-15

2015-16

The companys dividend pay-out ratio has been inconsistent over time as is evident from the
graph but its shows a general downward trend even though the profit after tax of the company
has been stable or decrease by a small margin in the past five years.
The main reason of this trend is the fact that the company undertook some major expansion
plans during the time period. Some of the major projects undertook includes the joint venture
with the Sri Lankan Ceylon Electricity Board (CEB) in 2011 for development of 500 MW
power plant.
The company also signed a joint venture with Bangladesh Power Development Board
(BPDB) in 2012 for development of 1320 MW power plant in Bangladesh.
In 2013, the company added 4,170 MW capacity to its operations to make its total capacity
41,187 MW. For this project, the company spent around Rs. 20,200 crore.
In 2014, NTPC expanded its production in Telangana to 2x800 MW plants in its
Ramagundam power plant.

Dividend Paid and Share Price

Dividend Paid and Share Price
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0

Dividend Paid

Share Price

A relationship could not be established between the share prices of company and its dividend
paid or dividend pay-out ratio. Even though the dividend paid has increased over time, the
share prices of the company has gone down steadily, except of some exceptions.
Conclusion
Through the results of this report, it can be concluded that although distributing regular
dividends do attract investors, they can never be solely relied upon as in addition to the
dividends paid, there are several other factors that determine the share price of the company.
It can also be concluded that share price of the company is also affected by many qualitative
factors in addition to profit after tax, dividend declared, EPS etc.

References
Annual Reports. (2016). Retrieved from NTPC:
http://www.ntpc.co.in/en/investors/annual-reports
Dividend Payout Policies. (n.d.). Retrieved from eFinanceManagement:
https://www.efinancemanagement.com/dividend-decisions/dividendpayout-policies
Expansion Plans of NTPC. (2012, December 06). Retrieved from Press Information
Bureau: http://pib.nic.in/newsite/PrintRelease.aspx?relid=90120
NTPC Limited. (2016, September 13). Retrieved from Wikipedia:
https://en.wikipedia.org/wiki/NTPC_Limited
NTPC Ltd. (2016, September 12). Retrieved from HDFC Securities:
http://www.hdfcsec.com/Market/Announcements.aspx?
CoCode=12001&Type=EGM
NTPC Ltd. (2016). Retrieved from Yahoo Finance:
https://in.finance.yahoo.com/q/hp?
s=NTPC.NS&a=10&b=5&c=2005&d=02&e=31&f=2016&g=d
NTPC Plans New Plants at Old Sites. (2016, July 15). Retrieved from Business
Standard: http://www.business-standard.com/article/companies/ntpcplans-new-plants-at-old-sites-116071401364_1.html