NLCIL Plans IPO by 2026, Reports 12 Percent Revenue Increase in Q2FY25

NLC India Ltd. (NLCIL), a prominent player in India’s lignite mining and power generation, is set to launch an IPO for its renewable energy arm, NLC India Renewable Energy Ltd. (NIRL), targeting the second or third quarter of the next fiscal year (FY 2025-26). This was disclosed at the recently held NLCIL's Q2 FY’25 Institutional Investors Meet. 

According to NLCIL's Chairman and Managing Director, M. Prasanna Kumar, the company has already formed a 100 percent-owned subsidiary, NIRL, which will hold and manage all of NLCIL’s renewable assets. “We are actively transferring our existing renewable energy assets to NIRL,” Kumar stated, adding that the process is well underway. To facilitate this transition, NLCIL is working with the government to secure a tax exemption for the bulk asset transfer from the parent company to the subsidiary.

He further pointed out that if all proceeds as planned, the IPO could take place by the second quarter of the next financial year or 3rd quarter of the next financial year This move is expected to unlock value for shareholders and provide the necessary capital for NLCIL’s ambitious renewable energy expansion plans, which include scaling up renewable capacity from the current 4.6 GW to 20 GW by 2030.

Furthermore, the firm reported robust financial results for the first half of FY 2024-25, demonstrating notable growth across key metrics. The firm's revenue from operations reached INR 7,033.32 crore, a 12 percent increase from INR 6,294 crore in the same period last year. Total income also saw a significant rise, reaching INR 8,010 crore, up 20 percent from INR 6,662 crore in H1 FY 2023-24. Despite a modest 3 percent increase in profit after tax (PAT), which stood at INR 1,549 crore compared to INR 1,499 crore in the previous year, NLCIL continues to show solid financial performance. This growth reflects the company’s successful diversification and expansion efforts across its energy portfolio, including thermal, lignite, and renewable energy.

This financial strength has positively impacted NLCIL's market valuation, with its share price doubling to Rs. 282.50 as of September 30, 2024, from INR 134.95 a year ago—an impressive 109 percent increase, highlighting investor confidence in the company’s long-term potential.

Notably, recent reductions in solar module costs have lowered per-gigawatt project costs from INR 6 crore to an estimated INR 5-5.5 crore. To ensure profitability, NLC’s Board has set a 12 percent return on equity (ROE) target for renewable projects, with expected returns potentially reaching 14 percent.

Further solidifying its position, NLC has progressed on several key projects, including the Ghatampur and Talabira thermal plants, as well as a pioneering solar project on rehabilitated mined-out land, which is set to commence operations this year.

"While giving focus to renewables and aggressively adding the capacity. At the same time, we are adding the thermal capacity also, at the same time we are increasing our mining capacity also. So, we are maintaining a balance between all these three, because we believe that going forward both will be required. We cannot 100 percent rely on renewables and we cannot 100 percent rely on thermal, so we are taking a balanced approach and moving forward," said Kumar.

NLCIL is also exploring new green technology ventures, including lignite-to-methanol conversion, battery storage solutions, and green hydrogen projects, which could become substantial additions to its portfolio.