Power Generation Company enters into Joint Venture Agreement with Rajasthan Rajya Vidyut Utpadan Nigam Limited (RVUNL)
The stock gave multibagger returns of 114 per cent in just 1 year and a whopping 435 per cent in 3 years.
The Board of Directors of NLC India Limited (NLCIL), at their meeting, have unanimously approved the formation of a Joint Venture Agreement (JVA) with Rajasthan Rajya Vidyut Utpadan Nigam Limited (RVUNL) to establish a Lignite-based Thermal Power Station in Rajasthan. This strategic partnership aims to address the increasing energy demands of the region by utilizing the abundant Lignite reserves in the state.
NLCIL and RVUNL will collaborate to develop the necessary mines to ensure a steady supply of fuel for the Thermal Power Station. The project is subject to approval from the Government of India and other relevant regulatory bodies. Additionally, the Board has also granted in-principle approval to form a separate Joint Venture Company with RVUNL through NLC India Renewables Limited, a wholly-owned subsidiary of NLCIL. This JV will focus on developing renewable energy projects with a combined capacity of up to 2,000 MW. The establishment of this renewable energy JV aligns with NLCIL's commitment to sustainable energy generation.
The proposed Joint Venture agreements between NLCIL and RVUNL are not related to any promoter, promoter group, or group companies of either entity. Therefore, these transactions do not fall under the purview of related party transactions. The initial paid-up capital of the JV for the Thermal Power Station will be Rs 5,00,000. NLCIL and RVUNL will subscribe to the shares in the proportion of 74:26, respectively. The JV will issue equity shares at a par value of Rs 10 each.
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About NLC India Ltd
NLC India Ltd is a government-owned company in India primarily involved in lignite mining and thermal power generation. It operates mines in Tamil Nadu and Rajasthan, using lignite to produce electricity. This power is then sold to various states in India, including Tamil Nadu, Rajasthan, Andhra Pradesh, Kerala, Karnataka and Puducherry. As a Navratna company, NLC India holds a significant position in the Indian energy sector.
On Friday, shares of NLC India Ltd gained 0.16 per cent to Rs 275.10 per share with an intraday high of Rs 281.55 and an intraday low of Rs 272. The shares of the company have a PE of 19x whereas the industry PE is 35x. The stock’s 52-week high is Rs 311.65 while its 52-week low is Rs 117.
The company has a market cap of over Rs 38,000 crore and has been maintaining a healthy dividend payout of 25.4 per cent. The stock gave multibagger returns of 114 per cent in just 1 year and a whopping 435 per cent in 3 years. Investors should keep an eye on this multibagger power generation stock.
Disclaimer: The article is for informational purposes only and not investment advice.
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