NLC India Ltd. has added a new feature to its hat with the recent coal mine acquisition. The potential yield from the coalmine is around 30 million tonnes in a year, which can add significantly to the company’s growth in the future. The company acquired Odisha’s coalmine, which will help boost the lignite and coal production.
The Coalmine development and production agreement has been signed between the Ministry of Coal and NLC India Ltd. for Machhakata Coalmine, which is located in the Angul district of Odisha. The deal has been done in eight rounds of auction which was set up by the Ministry.
Surge in Production Capacity and Revenue
NLC India anticipates the total amount to acquire and develop the mine would be around ₹ 12000 crore and on a ‘revenue sharing’ model. It expects to start production in 2030. The production as per last year’s level is at 36.32 million tonnes annually, which can go up by another 30 million tonnes.
From the revenue perspective, in 2023-24 the company earned ₹ 8363 crore from its sale of power units while ₹ 7902 crore was generated from mining operations. That said, the profits were higher from the mining operations which was around ₹ 1550 crore. It was around 56% of the total profits of the company in that year. From the power generation and supply, the company earned around ₹ 907 crore in profits.
Prospects of NLC India Ltd.
With the new acquisition of the coalmine in Odisha, the revenue of the company can only increase as anticipated by the management. Mr. Prasanna Kumar Motupalli, the Chairman and MD of NLC India Ltd., commented that he expects the production of coal from the Talabira mines to go up to 16 million tonnes in this current year against the previous year’s production of 12.64 million tonnes. He also suggested that the company will probably sell the coal produced from its mines in the open market rather than entering into any long-term supply contract with any off-market clients. The company has plans for boosting its lignite production as well and by 2030, it aims to produce 100 million tonnes of coal and lignite.
NLC India has a joint venture with Uttar Pradesh Rajya Vidyut Utpadan Nigam where it holds 51% stakes and it has been allotted to the Pachwara South coal block in Jharkhand. From this mine, there are around 9-10 million tonnes of coal production every year, and since for the Ghatampur thermal power plant, only 5 million tonnes of coal is used to generate 1980 MW of electricity, the remaining coal produced to be sold in the open market.
Share Price Movement
As the company bagged the contract, the NLC India share price jumped to a record high and touched ₹ 302.60 per share yesterday, 15 July 2024. Today the share has been trading at around 297 per share at 2 p.m. Today it has dropped minutely from yesterday’s level; however, from the beginning of 2024, the stock has given an 18.63% return.
Source: https://www.thehindubusinessline.com/
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