Due to a variety of reason, NLC India has had to form two subsidiaries to put up renewable energy projects – NLC India Renewables Ltd (NIRL) and NLC India Green Energy Ltd (NIGEL). Today, both are wholly-owned subsidiaries of NLC India.
The public sector mining-cum-power generation company is now working on making NIGEL a subsidiary of NIRL, so that it becomes a step-down subsidiary of the parent company.
This is because NLC India plans to take NIRL public — an IPO is likely to happen a year down the line.
NIRL was formed to hold NLC India’s existing renewable energy assets of about 1.4 GW. Following the Centre’s ‘asset monetisation’ plan, the company is expected to monetise the renewable energy assets. However, the company cannot sell assets, while also building more elsewhere (in pursuit of its target of 6.5 GW by 2030). Hence, NLC India formed NIRL and transferred 1.4 GW to it, so that up to 49 per cent stake in NIRL could be sold. This way, it could monetise the assets, while having them in its books.
For the new renewable assets that the company is building (in Gujarat, Rajasthan and Assam), NLC India formed NIGEL.
Now, the plan is to make NIGEL a subsidiary of NIRL, to sustain investor interest in NIRL. NIRL will have only 1.4 GW of assets, but will be a sort of a holding company that owns NIGEL, which will continue to build and operate renewable energy assets.
In a recent chat with businessline, NLC India’s Chairman and Managing Director, Prasanna Kumar Motupalli, said the plan to make NIGEL a subsidiary of NIRL still needs several approvals.
Asked what if the approvals are not given, Motupalli said in that case, NIGEL would also go in for an IPO.
In an earlier conversation, he had said the company expected to raise ₹5,000 crore through ‘asset monetisation’. In June, NLC India said it would raise $600 m through external commercial borrowings (ECB) to fund its renewable energy projects.
Through NIGEL, NLC India is putting up solar projects of 600 MW in Gujarat and 810 MW in Rajasthan. The power would be sold to the respective states, at tariffs of ₹2.7 and ₹2.64 a kWhr, respectively. When these two projects are up and running, NIGEL would be a ₹1,000-crore company.
Q1 PAT up 37 pc
Meanwhile, NLC India today announced that its consolidated net profit for the quarter ended June 2024 had gone up 37 per cent compared with the corresponding quarter of last year – ₹566.70 crore against ₹413.57 crore, previously. Income rose 6.19 per cent to ₹3,640 crore, compared with ₹3,428 crore in the first quarter of last year.
On the BSE today, the NLC India share closed at ₹270.70, which was ₹16.30 (6.41 per cent) higher than the previous close, trading at 20.33 times its earnings per share and 2.35 times its book value per share.