Multibagger Power Sector PSU Soars 8.30% On Inking MoU With Rajasthan Govt

NLC India on Monday has inked a Memorandum of Understanding (MoU) with the Government of Rajasthan. The agreement, which entails the formation of a joint venture, is set to pave the way for the establishment of a 125 MW Lignite-based power plant and a massive 1000 MW Solar power plant in the state.

The announcement sparked a significant surge in NLC India's stock price, which soared by 7.24% to Rs 234 following the news.

The ambitious venture, with an investment exceeding Rs 7000 crore, underscores NLC India's commitment to diversifying its energy portfolio and embracing renewable sources. The MoU, signed between NLC India and Rajasthan Rajya Vidyut Utpadan Nigam (RVUNL), outlines plans for the development of a 125 MW Lignite Pit-head Thermal Power Plant in Bikaner district and a groundbreaking 1000 MW Solar Power Plant.

Additionally, a Letter of Intent (LoI) has already been issued for the setup of an 810 MW solar power plant, further solidifying NLC India's foothold in the renewable energy sector.

"This initiative aligns with NLC India's corporate plan to emerge as a power major with a capacity of 17 GW, including over 6 GW from renewable sources, by the year 2030," said in BSE Filling.

The move reflects NLC India's strategic vision to transition towards cleaner and sustainable energy solutions while simultaneously meeting the growing demands of the power sector.

NLC India, a renowned public sector undertaking, boasts a diversified portfolio encompassing lignite mining, coal mining, and power generation. With a lignite mining capacity of 30.1 million tonnes per annum (MTPA), coal mining capacity of 20 MTPA, and an installed power generation capacity of 6,071 MW, the company is a key player in India's energy landscape. Its power stations currently cater to the energy needs of five southern states - Tamil Nadu, Andhra Pradesh, Telangana, Kerala, Karnataka - as well as the Union Territory of Puducherry.

The expansion into Rajasthan marks a significant milestone for NLC India, as it not only strengthens the company's presence in North India but also underscores its commitment to contributing to the state's energy infrastructure. The thermal plant in Barsingsar, Rajasthan, has already been instrumental in meeting the region's power requirements, and the addition of new capacity is poised to further enhance the state's energy resilience.

In addition to expanding its renewable energy footprint, NLC India has been making significant strides in improving its financial performance. The company reported a consolidated net profit of Rs 250.42 crore in Q3 FY24, marking a substantial turnaround from the net loss of Rs 406.74 crore posted in the corresponding quarter last year.

Despite a 14% year-on-year decline in revenue from operations to Rs 3,164.40 crore in Q3 FY24, the company's profitability has witnessed a commendable improvement, signaling a positive trajectory for its future growth prospects.

NLC India is on a mission to become a major player in the Indian energy industry, and its most recent project in Rajasthan may open up new doors for expansion and sustainability. Through the use of its coal and lignite mining expertise and unwavering dedication to renewable energy, the firm is well-positioned to assume a leading role in India's shift towards a more sustainable and environmentally friendly future.