NTPC Limited has received penalty notices from both major Indian stock exchanges for regulatory non-compliance during the third quarter of fiscal year 2026. The state-owned power generation company disclosed the development through an official communication dated 28th February 2026.

Regulatory Fine Details

The company received notices dated 27th February 2026 from both the National Stock Exchange of India Limited (NSE) and BSE Limited regarding non-compliance with SEBI regulations. The exchanges have imposed identical fines for the violation.

Nature of Non-Compliance

The penalty relates to NTPC's failure to comply with Regulation 17(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for the quarter ended 31st December 2025. This regulation pertains to the composition of the board of directors, specifically the requirement to maintain adequate independent directors.

Company's Response and Defense

NTPC Limited has formally responded to both exchanges through a letter dated 28th February 2026, presenting its defense against the imposed penalties. The company's response highlights several key points:

• Government Company Status: NTPC emphasized its classification as a Government Company under Section 2(45) of the Companies Act, 2013
• Appointment Authority: The company clarified that according to its Articles of Association, the power to appoint or remove directors vests with the President of India
• Administrative Channel: All director appointments are processed through the Administrative Ministry, specifically the Ministry of Power (MoP)

Ongoing Compliance Efforts

The company has indicated that it is actively pursuing resolution of the compliance issue. NTPC stated that it is "consistently following up with MoP for appointment of requisite number of independent directors on the Board of NTPC Limited to comply with Regulation 17(1) of SEBI (LODR) Regulations, 2015."

Based on these circumstances, NTPC has contested that the fine should not be applicable, arguing that the non-compliance stems from the unique governance structure of government companies rather than any deliberate violation of regulatory requirements.

NTPC Limited has received a substantial tax demand order from the Bihar GST authorities, totaling ₹19,96,97,068. The order was issued by the Additional Commissioner CGST & Central Excise, Patna-1 on February 27, 2026, under Section 74 of the CGST Act 2017 and Bihar GST Act 2017.

Order Details and Allegations

The tax demand relates to alleged violations during financial years 2019-20 and 2020-21. The primary issue concerns the reversal of Input Tax Credit (ITC) in respect of credit notes, where the company had not originally availed the ITC. This technical violation has resulted in the substantial demand from the tax authorities.

Financial Breakdown

The total demand of ₹19,96,97,068 comprises multiple components as detailed by the tax authority:

Company's Response Strategy

NTPC has outlined its immediate response to the tax order. The company plans to file an appeal before the First Appellate Authority CGST & Central Excise (Appeals), Patna within the prescribed timeline. This legal recourse allows the company to contest the demand and present its case before a higher authority.

The power generation major has emphasized that this order will not have any material impact on the company's financials, operations, or other business activities. This statement suggests that NTPC views the matter as manageable within its current financial framework.

Regulatory Compliance

The disclosure was made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This regulation mandates listed companies to inform stock exchanges about material events that could impact investor decisions. The communication was signed by Company Secretary & Compliance Officer Ritu Arora, ensuring proper regulatory adherence.