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NLC India Shares Rise After 810 MW Solar Deal with RVUNL
By Stock Market - Admin | May 7, 2025
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On May 7, 2025, NLC India Limited, a Navratna Central Public Sector Undertaking (CPSU) under the Ministry of Coal, marked a significant milestone in its renewable energy journey by signing a Power Purchase Agreement (PPA) with Rajasthan Rajya Vidyut Utpadan Nigam Limited (RVUNL) for an 810 MW solar power project at Pugal Solar Park in Rajasthan. This agreement, executed through NLC India Renewables Limited (NIRL), a wholly-owned subsidiary of NLC India, has bolstered investor confidence, leading to a nearly 1% rise in NLC India’s share price on the same day. The project aligns with India’s ambitious target of achieving 500 GW of renewable energy capacity by 2030, as envisioned by Prime Minister Narendra Modi. This article explores the details of the agreement, its implications for NLC India’s renewable energy portfolio, the impact on its stock performance, and the broader context of India’s renewable energy landscape.
Background of NLC India and RVUNL
NLC India Limited
NLC India Limited, formerly known as Neyveli Lignite Corporation Limited, was established in 1956 and is headquartered in Neyveli, Tamil Nadu. As a Navratna CPSU, it is primarily engaged in lignite and coal mining, thermal power generation, and, increasingly, renewable energy projects. The company operates several thermal power stations, including Thermal Power Station-I (600 MW), Thermal Power Station-I Expansion (420 MW), and Barsingsar Thermal Power Station (500 MW), all of which are ISO-certified for quality and environmental management. As of September 30, 2024, the Government of India held a 72.20% equity stake in NLC India, underscoring its strategic importance to the nation’s energy sector.
NLC India has been diversifying its portfolio to include renewable energy, with a current capacity of 1.4 GW, primarily in solar and wind. The company aims to scale this to 10 GW by 2030, a sevenfold increase, through projects in states like Rajasthan, Gujarat, Assam, and Tamil Nadu. This strategic shift aligns with India’s commitment to reducing carbon emissions and transitioning to cleaner energy sources.
Rajasthan Rajya Vidyut Utpadan Nigam Limited (RVUNL)
RVUNL, a state-owned power generation company under the Government of Rajasthan, is responsible for developing and managing power projects in the state. It operates thermal, gas, and hydroelectric power plants and is actively involved in renewable energy initiatives, including the development of solar parks. The 2,000 MW Pugal Solar Park in Bikaner, Rajasthan, where the 810 MW project is located, is one such initiative. RVUNL’s role in facilitating land acquisition, regulatory approvals, and power evacuation infrastructure makes it a critical partner for projects like the one with NLC India.
Details of the 810 MW Solar Power Project
Project Overview
The 810 MW solar power project is NLC India’s largest solar initiative to date and is being developed under the Ministry of New and Renewable Energy’s (MNRE) Ultra Mega Renewable Energy Power Park (UMREPP) Scheme – Mode B. The project was awarded to NLC India through a competitive tariff-based bidding process conducted by RVUNL, ensuring cost-effectiveness and transparency. Located in the barren lands of the Bikaner district, the site benefits from abundant solar radiation, making it ideal for large-scale solar power generation.
The project is expected to generate approximately 2 billion units (BU) of green power annually, offsetting around 1.5 million tonnes of CO2 emissions each year. This significant environmental impact underscores the project’s role in advancing India’s climate goals. The PPA, signed on May 7, 2025, commits RVUNL to purchase the entire power output for 25 years, providing NLC India with a stable revenue stream and mitigating market risks.
Signing Ceremony
The agreement was formalised in a ceremony attended by key dignitaries, including Arti Dogra, Chairperson and Managing Director of Rajasthan DISCOMS and Secretary (Energy), Government of Rajasthan; Nathmal Didel, Managing Director of RVUNL; and Prasanna Kumar Motupalli, Chairman-cum-Managing Director of NLC India and Chairman of NIRL. The presence of these high-ranking officials highlights the strategic importance of the project for both NLC India and the state of Rajasthan.
Prasanna Kumar Motupalli described the project as a “jewel in the crown” of NLC India’s renewable portfolio, emphasising its role in positioning the company as a major player in the renewable energy sector. He stated, “The PPA marks a pivotal moment for NLCIL and reaffirms our commitment to clean and sustainable energy. This 810 MW project is not just our largest solar initiative—it is a symbol of our resolve to lead the country’s green energy future.”
Technical and Financial Aspects
The project will be implemented within the infrastructure of the 2,000 MW Pugal Solar Park, which provides ready access to land and power evacuation systems. This reduces logistical challenges and accelerates project execution. The estimated investment for the project has not been disclosed in public sources, but given the scale and NLC India’s recent board approval to invest Rs 3,720 crore in NIRL for various renewable projects, a significant portion of this funding is likely allocated to the Pugal project.
The competitive tariff secured through RVUNL’s bidding process ensures that the power generated will be cost-competitive, benefiting consumers in Rajasthan while maintaining profitability for NLC India. The project is expected to be completed within 18–24 months, aligning with the typical timeline for large-scale solar installations.
Impact on NLC India’s Share Price
Stock Market Reaction
Following the announcement of the PPA on May 7, 2025, NLC India’s shares rose by nearly 1% on the Bombay Stock Exchange (BSE). According to posts on X, the stock was trading at approximately Rs 217.75, with a market capitalisation of Rs 30,194.01 crore. This uptick reflects investor optimism about NLC India’s growing renewable energy portfolio and its ability to secure high-value contracts like the 810 MW project.
The stock’s performance is particularly notable given its recent volatility. On January 28, 2025, NLC India’s shares were quoted at Rs 208.56, down 0.55% after a five-session decline. By March 25, 2025, the price had risen to Rs 245.10, though it fell 4.50% from the previous close of Rs 256.65. The May 7 gain suggests that the market views the RVUNL agreement as a positive catalyst for future growth, particularly as NLC India expands its renewable energy footprint.
Analyst Perspectives
Analysts have responded positively to the agreement, citing NLC India’s strategic focus on renewables as a driver of long-term value. The company’s plan to launch an Initial Public Offering (IPO) for NIRL in Q4 FY26 or Q1 FY27 is expected to unlock further value by monetising its renewable assets. The board’s approval on November 21, 2024, to invest Rs 3,720 crore in NIRL and acquire 100% stake in the subsidiary for asset transfer underscores this strategy.
However, some analysts caution that NLC India’s reliance on lignite-based thermal power, which faced challenges in FY24 due to land acquisition issues and lignite shortages, could pose risks. The resolution of these issues and the resumption of lignite production in January 2024 have mitigated concerns, but the company’s ability to balance its thermal and renewable portfolios will be critical to sustaining investor confidence.
Strategic Importance for NLC India
Renewable Energy Expansion
The 810 MW project is a cornerstone of NLC India’s goal to achieve 10 GW of renewable energy capacity by 2030. The company’s current renewable portfolio includes 50 MW of wind power and 1.35 GW of solar power, primarily in Tamil Nadu. Recent projects include a 300 MW solar installation in Barsingsar, Rajasthan, 600 MW at Khavda Solar Park in Gujarat, and a 200 MW wind power project secured from SJVN Ltd in March 2025.
NLC India is also pursuing joint ventures to bolster its renewable capacity. In January 2025, NIRL signed an agreement with Assam Power Distribution Company Limited (APDCL) to develop 1,000 MW of solar projects in Assam, with NIRL holding a 51% stake. Additionally, a joint venture with the Rajasthan government aims to add 2 GW of renewable capacity, including the 810 MW Pugal project. These initiatives demonstrate NLC India’s proactive approach to scaling its renewable energy operations.
Financial Performance
NLC India’s financial performance provides context for the market’s positive response to the RVUNL agreement. In Q2 FY25, the company reported a 22.8% increase in revenue to Rs 3,657.27 crore, driven by higher power generation and lignite sales. However, its consolidated net profit fell 15.9% to Rs 911.85 crore, reflecting higher operational costs and investments in renewable projects. The 810 MW project, with its long-term PPA, is expected to contribute to revenue stability and improve profitability as NLC India scales its renewable operations.
Asset Monetization
The creation of NIRL as a dedicated renewable energy subsidiary is part of NLC India’s asset monetisation strategy. The transfer of renewable assets, valued at Rs 6,263 crore as of September 30, 2024, to NIRL will streamline operations and enhance the subsidiary’s attractiveness for the planned IPO. This move is expected to attract institutional investors seeking exposure to India’s growing renewable energy sector, further boosting NLC India’s market valuation.
Broader Context: India’s Renewable Energy Landscape
National Renewable Energy Goals
India’s target of achieving 500 GW of renewable energy capacity by 2030 is a cornerstone of its climate and energy policies. As of January 2025, the country’s total installed power capacity stood at 466.26 GW, with renewables accounting for a significant portion. The MNRE’s UMREPP scheme, under which the Pugal project is being developed, aims to create large-scale solar parks to accelerate renewable energy deployment.
The government’s focus on competitive bidding, as seen in the RVUNL process, has driven down solar tariffs, making renewable energy more accessible to consumers. Initiatives like the Production Linked Incentive (PLI) scheme for solar manufacturing and the Green Hydrogen Mission further support the sector’s growth.
Rajasthan’s Role
Rajasthan has emerged as a hub for renewable energy in India, thanks to its abundant solar radiation and vast tracts of barren land. The state has set a target of producing 125 GW of solar energy by 2030, supported by investments worth over Rs 28 lakh crore signed in 2024. RVUNL’s development of solar parks, such as the 2,000 MW Pugal Solar Park and a planned 1,500 MW park, positions Rajasthan as a leader in India’s renewable energy transition.
Other companies, such as Indraprastha Gas Limited (IGL), which approved a 500 MWp solar project in Rajasthan in April 2025, and Singareni Collieries Company Ltd (SCCL), which signed an Mou with RVUNL for 3,100 MW of thermal and solar projects in March 2025, are also contributing to the state’s renewable energy ecosystem.
Challenges and Opportunities
While India’s renewable energy sector is poised for growth, challenges such as land acquisition, grid integration, and financing remain. NLC India’s experience with lignite shortages in FY24 highlights the importance of robust project planning and stakeholder coordination. However, the company’s ability to secure large-scale projects like the 810 MW Pugal initiative and its partnerships with state governments demonstrate its capacity to navigate these challenges.
Opportunities in energy storage, green hydrogen, and hybrid renewable projects offer further growth potential. NLC India’s planned 2,000 MW of renewable projects and 375 MW of lignite-based thermal projects in Rajasthan, as well as its exploration of wind and solar projects in other states, position it to capitalise on these trends.
Environmental and Social Impact
Environmental Benefits
The 810 MW project’s ability to offset 1.5 million tonnes of CO2 emissions annually is a significant step toward reducing India’s carbon footprint. By replacing fossil fuel-based power with clean energy, the project contributes to improved air quality and public health in Rajasthan and beyond. Its alignment with India’s commitments under the Paris Agreement reinforces NLC India’s role in global climate action.
Social and Economic Benefits
The project is expected to create jobs during construction and operation, boosting the local economy in Bikaner. NLC India’s history of community engagement, such as its flood relief efforts in Cuddalore in December 2024, suggests that it will prioritise corporate social responsibility in Rajasthan. Affordable power from the project will also benefit consumers, supporting economic development in the state.
Future Outlook for NLC India
Renewable Energy Pipeline
NLC India’s renewable energy pipeline is robust, with projects like the 600 MW Khavda Solar Park, 1,000 MW in Assam, and a 200 MW wind power project in progress. The company’s joint venture with RVUNL for an additional 2 GW of renewable capacity and its exploration of lignite-based thermal projects in Rajasthan indicate a balanced approach to energy development.
IPO and Financial Strategy
The planned IPO for NIRL in FY26 will be a critical milestone, enabling NLC India to raise capital for further renewable investments. The company’s strong financial position, with a market capitalisation of Rs 30,194.01 crore as of May 7, 2025, and government backing provide a solid foundation for these ambitions.
Competitive Landscape
NLC India faces competition from private players like Adani Green Energy and Waaree Renewable Technologies, as well as other CPSUS like NTPC and SJVN. However, its Navratna status, access to government schemes, and strategic partnerships give it a competitive edge. The company’s focus on cost-competitive projects and long-term PPAS will be key to maintaining its market position.
Conclusion
The signing of the Power Purchase Agreement between NLC India Renewables Limited and RVUNL for the 810 MW solar power project at Pugal Solar Park is a landmark achievement for NLC India. The project not only strengthens the company’s renewable energy portfolio but also reinforces its commitment to India’s green energy goals. The nearly 1% rise in NLC India’s share price on May 7, 2025, reflects market confidence in the company’s growth trajectory. As NLC India continues to expand its renewable capacity, pursue asset monetisation through NIRL’s IPO, and navigate the evolving energy landscape, it is well-positioned to play a leading role in India’s transition to a sustainable future. The 810 MW project, with its environmental, economic, and social benefits, is a testament to the power of public-private collaboration in driving clean energy innovation.