NLC India To Invest Rs 3,720 Crore In Arm For Renewable Projects

NLC India Ltd. will invest up to Rs 3,720 crore in its wholly owned subsidiary NLC India Renewable in one or more tranches for the various renewable projects. This is subject to compliance with DIPAM guidelines and necessary approvals of MoC and other departments.

The company will be investing in the wholly owned subsidiary by way of cash, the company said in an exchange filing on Tuesday. The investment will be used for the development of renewable power projects in Gujarat and Rajasthan.

NLC India will also acquire a stake by way of subscription for the transfer of renewable assets to NIRL under the asset monetization plan, the company said through an exchange filing on Tuesday. The book value of the renewable energy assets, including CWIP of the ongoing NPC projects as of September, is Rs 6,263 crore.

The transfer is for carrying out the existing renewable power projects NLCIL under the asset monetization plan.

In addition, the board of directors has issued a letter of comfort to subsidiary companies "for their borrowings based on their requirements from time to time." This indicates that the parent company will extend support to the subsidiaries on a case-to-case basis depending on the requirement. The letter has been extended to NLC India Renewables Ltd. and NLC India Green Energy Ltd., wholly owned subsidiaries, and Neyveli Uttar Pradesh Power Ltd. and NLC Tamil Nadu Power Ltd., which are material subsidiaries of the company.

NLC India stock rose as much as 1.71% during the day to Rs 238.60 apiece on the NSE. The stock closed 1.02% higher at Rs 237 per share. This compares with a 0.28% advance in the benchmark Nifty 50. It has risen 41.20% in the last 12 months and fallen 5.28% year-to-date.

The two analysts tracking the company maintain a 'buy' rating, according to Bloomberg data. The average 12-month consensus price target implies an upside of 46.6%.