NLC India eyes ₹4,500 crore IPO for green energy arm by June next year

The company is in the process of transferring all its renewable energy assets, largely comprising solar projects with a cumulative valuation of about ₹8,000 crore, to the subsidiary, Prasanna Kumar Motupalli, chairman and managing director (CMD) at the public sector lignite miner, told Mint. 

NLC will hold more than 51% shares in its subsidiary post the listing, he added.

Of the 6,071.06MW of its power generation capacity, the majority of it is lignite and coal-based energy, while renewable projects comprise about 1,431MW. Currently, NLCIL operates 1,380MW of solar power plants in the southern districts of Tamil Nadu and the Andaman & Nicobar Islands, as well as a 51MW wind power plant in the Tirunelveli district of Tamil Nadu.

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As part of its expansion plan and in line with the Centre’s goal of installing 500GW of non-fossil fuel capacity by 2030, NLC has set an ambitious target to contribute 10.11GW to this through various renewable energy projects across Tamil Nadu and other states, contingent upon their technical and commercial feasibility, says its annual report for FY24. NLCIL also intends to be involved in solar park projects initiated by different state governments. It has also joined the International Solar Alliance as a member.

NLCIRL was established in FY24 with an aim to consolidate, monetize and optimize the value of NLC’s renewable assets and ensure efficient management. Further, a step-down subsidiary, NLC India Green Energy Ltd, was created to lead the company’s future renewable energy initiatives.

The company was also looking at modernizing its power infrastructure to ensure that it meets and exceeds the evolving energy demands while maintaining adherence to sustainability, the CMD had said in his message to shareholders in the annual report for the last fiscal. In its diversification efforts, the lignite mining and power generation company was also exploring innovative projects such as turning lignite to methanol, and green hydrogen initiatives, he had said.

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That comes when the government is keen on public sector companies listing their green energy subsidiaries on the exchanges. On 26 September, Mint reported that the Centre has asked state-run energy companies to consider taking their renewable businesses public. The objective is to create value for itself and shareholders rather than sell assets to private entities.

NTPC Green Energy Ltd has already filed draft papers for a ₹10,000 crore IPO that is expected to open in early November, while SJVN Ltd is planning to take its green energy business SJVN Green Energy Ltd public, and navratna enterprise Solar Energy Corp. of India (Seci) plans a public offer within the next two years.

The public market route is part of the government’s asset monetization and disinvestment plans. As of FY24, a total of ₹3.58 trillion was raised within three years under the ₹6 trillion National Monetization Pipeline. In FY24, around ₹1.56 trillion was raised against the annual target of ₹1.8 trillion.

 

Correction: An earlier version of this article said NLC would offload 51% shares in its subsidiary NLC India Renewables. NLC clarified later that it would hold more than 51% shares in the subsidiary post its listing.

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