This PSU stock surges 12% amid OFS by govt; zooms 250% in a year

Shares of NLC India, a public sector unit under the administrative control of the ministry of coal, soared over 12% in intraday trade on Monday as the government will sell up to 7% stake in the company through an offer for sale (OFS) route. The PSU stock has witnessed a strong rally in the last one year, delivering 250% returns to its shareholders, rebounding from its 52-week low of ₹69.79 touched on March 28, 2023.

Early today, NLC India shares opened higher at ₹238.05, up 9% against the previous closing price of ₹218.20 on the BSE. During the session so far, the largecap stock gained 12.1% to hit an intraday high of ₹244.60, before settling at ₹232.90, up 6.7%. The market capitalisation climbed to ₹32,294 crore with 21.46 lakh shares changed hands compared to the two-week average of 3.33 lakh stocks.

Currently, the stock trades 17% lower than its 52-week high of ₹293.60 touched on February 5, 2024. The PSU shares have risen 81% in the past six months despite 7% correction in the calendar year 2024. The counter gained over 8% in the past one month and 1.5% in a week.

The government of India, which holds 79.2% stake in the company, offer to offload 5% of its stake with an option to sell an additional 2% stake if there is more demand. The floor price is ₹212 per share. 

For non-retail investors, the window opened on March 7, which was subscribed 2.92 times. Retail investors and non-retail investors (who chose to carry forward their un-allotted bids) can bid today.

In a separate development, Separately, NLC India on March 10 signed a pact with the government of Rajasthan for formation of joint venture for adding Thermal and Renewable capacity. The company has inked a JV agreement with Rajasthan Rajya Vidyut Utpadan Nigam Ltd. (RVUNL) to set up 125 MW Lignite based power plant and 1,000 MW solar power plant.

“The MoU between NLC India Limited and RVUNL entails a staggering investment of more than ₹7,000 crores. Among the notable projects, the MoU outlines the establishment of a 125 MW Lignite Pit-head Thermal Power Plant In Bikaner district and a massive 1,000 MW solar power plant, further reinforcing NLCIL's commitment to renewable energy initiatives,” it said in an exchange filing.

Additionally, a letter of intent for the setup of an 810 MW solar power plant has already been issued. This is in line with the corporate plan of NLC India to become a power major of 17 GW capacity with more than 6 GW renewable capacity by 2030, it added.

Last week, NLC India Green Energy (NLCIL), the green arm of NLC India, signed a power purchase agreement (PPA) with Gujarat Urja Vikas Nigam Limited (GUVNL) for a 600 MW solar power project. The contract will be the single largest solar project developed by the company as on date.

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