Shares of NTPC rose 2.35 percent after the company said it has agreed to sign fuel supply agreement with Coal India.
The signing of the agreement assures fuel supply to the state-run power producer.
Under the agreement, Coal India will have to supply minimum 65 percent of the coal committed, failing which the company will attract penalty. Earlier the trigger level for the penalty was 80 percent of the committed supply.
Coal India has already signed such agreements with 27 power producers. Some of the companies, including NTPC, did not sign the agreement as they said it lacked any commitment.
The Prime Minister’s Office had convened a meeting of the companies and Coal India, in a bid to sort out the issues.
The fuel supply agreements are part of the government’s initiative to provide coal to the fuel-starved power sector. In April, the government had issued a presidential decree to Coal India sign such agreements with power producers.