Should the government pre-judge whether a listed company can diversify its business interests or not, even if it is the owner, without giving the latter’s management an opportunity to present a considered business plan? That’s how the wind seems to be blowing in the case of power generator NTPC Ltd’s interest in diversifiying into manufacturing power equipment.
The major domestic producer Bhel Ltd also state-owned, has its hands full— and as the shortage of equipment is set to rise further in the coming years, the need for other suppliers is a given. The government is said to be thinking of promoting private player Larsen & Toubro, implying preference in procurement. But NTPC, as the largest power producer, has a market edge in generation and thus a captive market for equipment. Shouldn’t the issue of its entering the business be decided on commercial merit, rather than allocations by the government and advice by its various wings?