Synopsis: NLC India jumped after approving the listing of its renewables arm, unlocking green energy value through up to 25% dilution while retaining control. The move, backed by a Rs 66.6 crore infusion, sharpens capital efficiency and reinforces its clean-energy growth ambitions; the company also declared an interim dividend of Rs 3.6.
The shares of this company, which is engaged in the business of mining lignite and generating power by using lignite as well as renewable energy sources, had its shares in momentum today after the company announced the approval for the listing of its subsidiary NLC India Renewables Limited (NIRL).
With the market cap of Rs 35,262 crore, the shares of NLC India Ltd gained 3% after reaching a high at Rs 263.05, compared to its previous day’s closing price of Rs 255.85. The shares are trading at a PE of 13.4, whereas their industry PE is at 26.5.
Listing approval
The board decision of NLC India granting in-principle approval for listing its wholly-owned subsidiary, NLC India Renewables Limited (NIRL), is quite significant since it is in line with the governmental strategy called the National Monetisation Pipeline of the Government of India. The planned dilution of up to 25% of equity via the public offer is quite significant since it would like to unlock value from its renewable business but still maintain control of the business through its equity ownership. This is also acting as an independent fundraising avenue for NIRL without overleveraging its parent balance sheet.
From the capital allocation perspective, the listing plan is supported by the board’s authorisation to invest up to Rs 66.60 crore in NIRL through equity infusion at face value. This ensures that the renewable projects in execution through JVs are suitably funded before the listing, if it happens. This also lessens the risks of acquisition or valuation, wherein the investment is done in-house into the subsidiary, and also readies the subsidiary for scalability, transparency, and market discovery.
On the whole, the announcement depicts the two-pronged approach of NLC India, whereby it intends to benefit its shareholders in the short run by means of a 36% interim dividend payout of Rs 3.6 per share, while in the long run, it would reap the benefit of its independent exploitation of the green energy portfolio. The decision regarding the listing of the new subsidiary increases the transparency level of the renewable energy portfolio and increases the efficiency of capital, as well as improves NLC India’s position based on a PSU that’s increasingly exposed to clean energy sources
Financials
The revenue from operations for the company stood at Rs 4,178 crores in Q2 FY26 compared to Q2 FY25 revenue of Rs 3,657 crores, up by about 14 per cent YoY. However, the net profit stood at Rs 725 crore in Q2 FY26, down compared to the Rs 982 crore profit in Q2 FY25.
The outlook indicates the aggressive growth plans of NLCIL from 2025 to 2030, with mining capacity increments from 50.1 MTPA to 104.35 MTPA, with major increments from 30.1 MTPA to 41.35 MTPA for lignite and 20 MTPA to 62 MTPA for coal, and also includes 1 MTPA of critical minerals.
The thermal power additions indication also indicates massive growth from 5,960 MW to 10,020 MW, with the highest growth indicated in the renewable power additions from 1,599 MW to 10,110 MW, with solar additions dominating from 1,548 MW to 9,609 MW and wind additions from 51 MW to 501 MW.
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