The projects are Avantha Power and Infrastructure Ltd’s (APIL) 600 megawatt (MW) Jhabua Power Ltd (JPL) in Madhya Pradesh and Adhunik Thermal Energy Ltd’s 540MW Jamshedpur project in Jharkhand.

NTPC may announce its acquisition plans before the financial year ends on 31 March.

“These opportunities have been put on fast track. They have given NTPC an offer and a technical team from NTPC has been sent for due diligence. This is the initial list, more projects may come to this stage later,” a person aware of the development said on condition of anonymity.

NTPC had earlier been planning to acquire 8,000-9,000MW of capacity and created a committee under the board’s supervision to evaluate potential opportunities.

The utility received 34 proposals for a total of 55,000MW in response to the expression of interest (EoI) it floated early last year for acquiring generation capacity from other power producers.

In addition, it has also received around 12 proposals in response to a second EoI floated in December.

NTPC, which has cash reserves of around Rs.16,867.7 crore, has set aside Rs.10,000 crore for acquisitions. Accounting and consulting firm KPMG has been given the acquisition mandate by the state-owned power producer.

“More people have evinced interest after NTPC floated the second expression of interest,” said a second person familiar with the matter who also didn’t want to be identified.

An NTPC spokesperson declined to comment. An Avantha Group spokesperson said in an emailed response that it “does not comment on market rumours or speculations”. Queries emailed to the spokespersons of Adhunik Group and KPMG hadn’t been answered till press time.

Billionaire Thapar is restructuring the group’s business portfolio by selling power assets. Avantha Power in November last year said it will sell its Korba West Power Co. Ltd unit to Adani Power Ltd for Rs.4,200 crore.

There have been other deals too, in the power sector. Sajjan Jindal-controlled JSW Energy Ltd said last year that it will buy three hydropower projects of Jaiprakash Power Ventures Ltd.

“The scope for deal flow is substantial in conventional power, but most players are on a ‘wait and watch’ mode due to unresolved regulatory issues. Also, many of these targeted assets suffer low returns due to project delays and uncovered fuel or sales contracts giving acquirers some pause for thought. But this also means that efficient, fully contracted, regulated projects are seen as attractive,” Kameswara Rao, partner and leader, power utilities and mining at PricewaterhouseCoopers India, said in a separate emailed statement.

Slowing economic growth, high borrowing costs and delays in securing regulatory approvals had hit many infrastructure projects in India, including power plants, hurting the ability of their promoters to repay creditors and vendors. The situation is expected to improve as economic growth speeds up in the coming years.

NTPC is seeking to boost power generation capacity to meet growing demand for electricity in a perennially power-short country.

Of India’s current generation capacity, NTPC has a 17% share, with an installed power generation capacity of 43,128MW. The utility plans to add 14,038MW in 2012-17 and has an ambitious capital expenditure target of Rs.1.5 trillion. It has set itself the target of becoming a 128,000MW power producer by 2032.

NTPC had also been advised by its audit committee to scale back its planned capacity addition targets because of muted demand and to revisit its inorganic growth plans. The utility’s plant load factor, a measure of average capacity utilization, was 81.5% in 2013-14 against 83.08% in 2012-13 for coal-fuelled projects. There are no takers for around 5,000MW of electricity offered by the utility.

“This is a ridiculous situation. On one hand, NTPC has spare capacity but no procurer for it. On the other, there is a substantive part of our population which doesn’t have access to electricity. These acquisitions make sense as India’s electricity requirement is bound to go up, given the uptick in the Indian economy,” added the first person quoted above.

India’s energy woes have meant that the country has been hard-pressed to generate enough power to keep its economic engine chugging, and at a price that makes its manufacturing competitive. The country faced a peak power deficit of 3.3% in December.

Analysts say the data doesn’t capture the real demand, ascribing the lower deficit to the unwillingness of state electricity boards to buy enough power because they cannot afford to do so.