President of India-backed multibagger coal mining enters into a joint venture agreement with Rajasthan Rajya Vidyut Utpadan Nigam Ltd
The stock is up by 80 per cent from its 52-week low of Rs 283.15 per share and gave multibagger returns of over 200 per cent in 3 years.
Coal India Limited (CIL) has entered into a Joint Venture Agreement (JVA) with Rajasthan Rajya Vidyut Utpadan Nigam Limited (RRVUNL) to establish a 2x800 MW Brownfield Thermal Power Project at RRVUNL's existing Kalisindh Thermal Power Station. This partnership also extends to other thermal power-related projects and renewable energy generation obligations. The JVA outlines the terms of the joint venture, including the shareholding structure, governance, and key rights and responsibilities of the parties.
The Joint Venture Company (JVC) will be a private limited company with an initial paid-up share capital of INR 10,00,000. CIL and RRVUNL will hold 74% and 26% equity shares in the JVC, respectively. The JVC's registered office will be located in Jaipur, Rajasthan. The agreement grants CIL and RRVUNL the right to nominate directors to the JVC's board, with CIL having four nominees and RRVUNL having two. The JVA also includes provisions for the issuance of shares, conflict of interest management, and potential termination or amendment of the agreement.
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About the Company
Coal India Ltd, a giant public sector company under India's Ministry of Coal, is the world's largest coal producer. Established in 1973 through the nationalization of the coal industry, Coal India Ltd mines and produces coal, operating washeries to process it. Their primary customers are power and steel plants, but they also supply coal to cement factories, fertilizer companies, and brick kilns.
The company has a market cap of over Rs 3 lakh crore and has been maintaining a healthy dividend payout of 51.8 per cent. The shares of the company have a PE of 8x, an ROE of 53 per cent and an ROCE of 65 per cent. The stock is up by 80 per cent from its 52-week low of Rs 283.15 per share and gave multibagger returns of over 200 per cent in 3 years. Investors should keep an eye on this Large-Cap stock.
Disclaimer: The article is for informational purposes only and not investment advice.