Rs 50,000 Crore Investment: LIC-Backed Power Generation Company signs a MoU with Government of Rajasthan
The stock is up by 97 per cent from its 52-week low of Rs 48.48 per share.
On Tuesday, one power stock was trading in the green, up 0.66 per cent to an intraday high of Rs 95.56 per share from its previous closing of Rs 94.93. The stock’s 52-week high is Rs 118.45 and its 52-week low is Rs 48.48.
The stock name is National Hydroelectric Power Corporation Limited (NHPC Ltd).
NHPC Limited, a leading hydropower generation company in India, has entered into a Memorandum of Understanding (MoU) with the Government of Rajasthan on September 30, 2024. The strategic partnership aims to accelerate the development of Pumped Storage Projects, Renewable Energy Projects (Solar, Floating Solar, and Wind) and Battery Energy Storage Systems within the state. This ambitious venture is estimated to require a substantial investment of approximately Rs 50,000 crore. The MoU outlines the collaborative efforts between NHPC and the Rajasthan government to identify suitable project locations, secure necessary approvals and facilitate the implementation of these clean energy initiatives.
Key terms of the agreement include NHPC's commitment to invest in various renewable energy projects across Rajasthan. The Rajasthan government, in turn, will provide support in obtaining essential permits, clearances, and approvals from relevant state departments. This partnership is expected to contribute significantly to Rajasthan's renewable energy goals, promote sustainable development, and enhance the state's energy security.
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About the Company
NHPC, India's leading hydropower company, generates and sells bulk power. It also manages construction projects, offers consultancy services, and trades power. With a current capacity of 7,097 MW, primarily from hydro sources, NHPC actively develops new projects, including 15 solar and hydro initiatives totalling 10,449 MW. It plans to add 800 MW in FY25 and 2,000 MW in FY26 while venturing into solar with a recently commissioned 380 MW project and plans for an additional 2,000 MW. Aiming to diversify, NHPC has signed MoUs with several states for pumped storage and renewable energy projects and is exploring asset monetization options.
According to the financials, NHPC Ltd has a market cap of over Rs 95,000 crore with a 3-year stock price CAGR of 56 per cent. The company has been maintaining a healthy dividend payout of 50.7 per cent. The stock has a PE of 28x, an ROE of 10 per cent and an ROCE of 8 per cent. As of June 2024, LIC owns a 3.84 per cent stake in the company. The stock is up by 97 per cent from its 52-week low of Rs 48.48 per share.
Disclaimer: The article is for informational purposes only and not investment advice.