Ladies and gentlemen, good day and welcome to NLC India Q3 FY25 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone.
Please note that this conference is being recorded. I now hand the conference over to Mr. Prateek Singh from DAM Capital. Thank you, and over to you, sir.
Thanks, Sagar. Good evening, everybody. On behalf of DAM Capital Advisors, I would like to welcome you all to the Q3 and nine-month FY25 Earnings Call of NLC India Limited. Today, we have with us Sri Prasanna Kumar Motupalli, Chairman and Managing Director of NLC, along with Senior Management of the company. The call will begin with opening remarks by CMD Sir, after which we'll open the lines for Q&A.
Before we begin, we must remind you that the discussion on today's call may include certain forward-looking statements and hence should be viewed in conjunction with the risk that the company may face. I would now like to hand over the line to CMD Sir for his opening remarks. Thanks, and over to you, sir.
Thank you, Prateek ji, for the introduction, and a warm thank you to DAM Capital for hosting this investor conference call. I also want to extend my gratitude to all the participants for your interest in NLCIL and to our investors for your unwavering support. Today, I'm happy to engage with NLCIL shareholders and address any questions you might have regarding our financial results for the quarter and nine months ended December 31st, 2024, as well as provide updates on our capacity addition program.
Your involvement and feedback are invaluable to us, and I look forward to a productive discussion. Hi, Prasanna Kumar Motupalli, Chairman and Managing Director of NLC India Limited. And joining with me are Dr. Suresh Chandra Suman, Director of Mines and Director of Planning and Projects - Additional Charge, Sri Samir Swarup ji, Director of Human Resources, Sri M. Venkatachalam ji, Director of Power, and Dr. Kumar Acharya ji, Director of Finance, along with Senior Management of the company.
Before the introduction, I would like to brief on the major highlights and performance of NLCIL during the quarter and nine months ended December 31st, 2024. NUPPL, Ghatampur Thermal Power Station, unit number one of 660 MWs, successfully started its commercial operations, by which NLCIL group's installed power generation capacity increased from 6071 MWs to 6731 MWs. Also, this is the first unit of ultra-supercritical technology of NLCIL group.
Coal mine development and production agreement, CMDPA, executed between the nominating authority of the Ministry of Coal and NLCIL for the new Patrapara South coal mine project of 12 million metric tons per annum. With this, the total cumulative capacity of NLCIL group crossed 100 million metric tons.
NLCIL signed a JV agreement with RVNL for setting up of 3-125 MW lignite-based thermal power station in the state of Rajasthan. Also, NIRL, the wholly-owned subsidiary of NLCIL, signed a JV agreement with RVNL for developing 2 gigawatts of renewable power project in the state of Rajasthan. NIRL, wholly-owned subsidiary of NLCIL, signed a joint venture agreement with Assam Power Distribution Company, APDCL, for development of solar power project in Assam of almost 1 gigawatt capacity.
NLCIL has been recognized as one of the best performers under the special campaign four in the new initiative best practice category and also won first prize in the SACHATA initiatives. NLC India Limited has been confirmed with the prestigious Mining Innovation Award for upholding high standards of operations in mining. CAPEX achievement up to December 2024 is INR 5,247 crore that has exceeded the annual target of financial year 2024-25.
The Ministry of Finance, through a Gazette of India, has granted capital gains tax exemption under the Income Tax Act for the transfer of renewable energy assets from NLCIL to NIRL, a wholly-owned subsidiary of NLCIL. NLCIL received four five-star rating awards for Mine One, Mine One A, and Barsingsar, and Talabira for the performance based year 2022-23 from the Honorable Minister of Coal and Mines at New Delhi. With this, the total five-star ratings received by NLCIL crossed 17.
The Ministry of Coal accorded approval for the revised cost estimates of INR 21,780 crore for 3 to 660 MW Ghatampur Thermal Power Project of NUPPL. For the financial year 2024-25, the NLCIL board has approved payment of interim dividend at the rate of INR 1.5 per share. Coming to the physical performance of nine months ended December 2024, NLCIL achieved lignite production of 171.35 lakh metric tons, with 5.23% growth as compared to 162.83 lakh metric tons in the nine months ended financial year 2023-24.
NLCIL achieved all-time highest ever coal production of 115.16 lakh metric tons, with almost 40% growth as compared to 82.19 lakh metric tons in the nine months ended financial year 2023-24. This is also all-time highest ever lignite plus coal production for the company. Achieved gross power generation of 20.568 billion units, with 4.71% growth as compared to 19.643 billion units in nine months ended financial year 2023-24. This includes RE power generation of 1.579 billion units.
Coming to the financial performance of nine months ended December 2024, all-time highest revenue from operations of INR 11,445 crore as against INR 9,458 crore in the corresponding period of the previous year, registering a growth of 21%. All-time highest total income of INR 12,909 crore as against INR 9,912 crore in the corresponding period of the previous year, registering a growth of 30%.
All-time highest profit after tax of INR 2,245 crore as against INR 1,754 crore in the corresponding period of the previous year, registering a growth of 28%. Once again, I wholeheartedly thank all the investors for their support and encouragement all these years. I hope the same would continue in the future also. Thank you. Thank you all.
Sir, should we open the floor for questions?
Yes.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again, you may press star and one to ask a question now.
Our first question comes from Mohit Kumar from ICICI Securities. Please go ahead.
Sir, good evening, and thanks for the opportunity. And congratulations on a very good quarter. My first, sir, it's heartening to see NLC doing a very good work in thermals, renewables, and many new coal mines. My first question is, sir, what are the under-recovery on the standalone and consolidated basis in nine months? And what is the status of NLC, that 500 MW, which was undergoing a refurbishment?
At the outset, I thank you for the encouraging words. And coming to the under-recovery, against the last year's under-recovery for the first nine months of INR 725 crore, this year's under-recovery is INR 517 crore. And standalone basis, against last year's INR 571 crore, this year is around INR 500 crore.
Understood, sir. And sir, what is the status of the power plant where we are trying to rectify?
As I told you, in the last investor meet, we have taken the short-term measures and the long-term measures for improving the availability and reliability of our TPS-II Expansion units. The short-term measures resulted in improvement in the availability and reliability. And the long-term modification in one of the units is started in the month of November, and that is expected to be completed in the second week of March. So in the current financial year, the unit will start its operation with improved reliability and availability.
And immediately after that, after observing that for a month, we'll be going for the modification in the other unit also. So once that is also completed, we are hopeful that there will be substantial improvement in the availability, reliability, and performance standard of this TPS-II expansion, and we will be able to substantially reduce our under-recoveries going forward.
Understood. My second question, sir, what is the status of one gigawatt NLC power plant? I think you're looking to start the work. Have you tendered this power plant, or can we expect this to be tendered out in the next six months?
This one gigawatt, there's two into 500 MWs in Neyveli. We got exemption permission from Central Electricity Authority for going for subcritical lignite. So we are in fast progress for tendering. We are expecting that in the month of by March end, the tender for the power plant will be floated, and we are targeting to complete this project at the earliest and add to our capacity.
Understood, sir. My last question is on the norms 9 to the account, norms 9. I think in this quarter, you have given an impact of around, I think, INR 400-odd crore to the profit in this quarter because there is a, I think, norms 9 SPS to CERC issued a tariff order August 1, 2024. Is it fair to say that impact is around INR 400 crore on the profit because of this order?
Okay. You are talking about just wait.
The NLC's number nine of the result?
CRC.
CRC.
The consolidated impact on the revenue is around INR 1,576 crore. And the positive impact in PBT is INR 934 crore, and PAT is INR 752 crore on consolidated basis for nine months.
No, no, no. Since my question on the particular quarter, I think this talks about only one tariff order, right, which was issued for the NTPL subsidiary company, correct?
Yes, yes, yes, sir.
Is it for lasting impact for this particular quarter, for this quarter, sir, not for nine months?
It is having positive impact of INR 647.51 crore.
Understood, sir. Okay, sir. Thank you, sir. Thank you, Mr. Lang. Thank you.
Thank you. Thank you.
Thank you. Next question comes from Aditya Velekar from Axis Securities. Please go ahead. Aditya, sir, your line is unmuted. Please proceed with your question.
Am I audible?
Yes, sir.
Yes, you're audible.
Congrats for the great set of numbers. Sir, my question is with regards to under-recovery. In the last call, we said that full year under-recovery will be in the range of INR 450 crore. What is that amount would be now? The drop in PLF at that TPS-II expansion and NTPL, as we progress on that boiler issue, do we expect any improvement on the basis of PLF for these two units going forward? What will be the final under-recovery you can expect now for full year?
Thanks for your encouraging words. And regarding under-recovery, there is a substantial improvement in the under-recovery of NTPL. You are asking NTPL also, no? The last financial year, it was more than INR 154 crore. But this financial year, it is almost nil. It is only INR 7 crore. And this will continue. And coming to the under-recovery on consolidated basis, against last year, INR 725 crore is now INR 517 crore. And we are expecting to land at around INR 600 crore by the end of this financial year.
Understood, sir.
The actions are already on to reduce it to a great extent in the next financial year. Already, the modification of TPS-II expansion is on.
Understood. And coming to Ghatampur...
Sorry?
Aditya, sir, we are losing your audio in between.
Am I audible now?
Yes, you're audible.
Yes, sir. Coming to Ghatampur, unit two and unit three, the earlier dates were December and March 2025. So are we sticking to that? And same for Pachhwara Coal Block, is it on track for March 2025? And lastly, on this new Patrapara Coal Mine, if you can share some timeline when it will be developed?
This commissioning to Pachhwara South Coal Block, earlier, we were targeting for March 2025.
Hello? Hello?
Just give me one moment, sir. Let me check. The line for the management seems to have been disconnected. Ladies and gentlemen, please hold on while we reconnect the line for the management back. Ladies and gentlemen, we have the line for the management reconnected. Please go ahead, sir.
Hello? So can I continue the answer to the question?
Sure.
There were three questions. One was about Pachhwara South Coal Block. The earlier expected production was March 2025. But there was some delay in the forest clearance stage one. That's why now the revised production target is July 2025. We are in the advanced stage of getting the forest clearance of stage two. We are hopeful that by July 2025, we'll be starting production.
MDO and all the things are in position, and we'll be starting production in July. Coming to Ghatampur, the earlier target for unit number one was December, that we completed in December. The unit is performing exceedingly well with more than 98% availability. Unit two, we are targeting May 2025, and unit three, October 2025. Before October 2025, all the three units will be COD will be declared.
Coming to the new Patrapara South Coal Block, we got it in commercial auction. It is having 12 million metric tons per annum capacity. The advantage with this block is that this new Patrapara block shares its boundary with Machhakata. We will be getting advantage of scale. The government-set target is 55 months, but we are targeting for starting production in 36 months. By February 2028, we'll be starting production from new Patrapara.
Yeah, that's very helpful, sir. Just one last question. So if you can just share the same timelines for our Rajasthan joint venture for 3x125 thermal plant and 2000 MW renewable plant and 1000 MW solar plant in Assam. So for these.
We signed that joint venture agreement with Rajasthan government for both three into 125 MW lignite-based power station and two gigawatt of renewable capacity. This three into 125 MW. The activities are on, but the JV formation is in the final stages. Once that is done, then we will go for tendering. We will be completing the project within the next 36-40 months. This is two gigawatt of renewable capacity. We are already in the process of finalizing the location. Within next 18 months,
once the joint venture is formed, within next 18 months, we'll be adding the entire two gigawatt capacity. Similarly, with the state of Assam, we signed a joint venture agreement with them for adding capacity of one gigawatt. There also, within 12-15 months, we will be adding the one gigawatt capacity. Already, land is identified for substantial capacity addition.
Yeah, thanks a lot. And all the best. I will get back in with you.
Thank you.
Thank you.
Thank you.
Participants, you may press star and one to ask a question. The next question comes from Rabindranath Nayak from Sunidhi Securities. Please go ahead. Mr. Rabindranath Nayak, your line is unmuted. Please proceed with your question. As there is no response from the line of the current participant, we'll move on to the next question. The next question comes from the line of Darsh Solanki from Axis Securities. Please go ahead.
Yeah, hi, sir. Thank you for this opportunity. Sir, mine is more of a bookkeeping question. So if you look at the financials of this quarter, there is a movement in regulatory deferral income of negative 789, which our PAT comes to around 696 crore. Sir, for our reference, do we for our profitability perspective, we look at the PAT after considering that movement, right? So our normalized PAT would be 696 crore. Is that a correct way to look at it?
Yes, yes.
Sir, so in the same context, so just wanted to understand. From the last conference call, our understanding was that for any favorable or unfavorable order, there are generally two impacts. One impact is in sales. Till the level the PPA is upgraded and post that it is adjusted from the regulatory deferral account for the PAT. Is that understanding correct? If not, can you share the view on it that how does that bookkeeping work?
It is correct only. But only some adjustments are required if the regulatory provision is not sufficient to the requirement of the order. So normally, on a conservative basis, we use to create the provision or income, whatever is there. So in case the order amount is different from that, so additional impact will be there. Otherwise, accounting adjustment, what you are telling, it's correct.
So in this quarter's context, if there's a negative 789 impact, so approximately a similar amount would be inflated, increased in your revenue. Is that the way to look at it?
Current quarter, you are telling, or nine months?
For the current quarter, so your current quarter regulatory deferral movement is INR 789 crore. So would that number be then included as a positive impact in the revenue? Is that how it works?
One minute, one minute.
Yeah.
This is an adverse impact in the profitability.
Okay, so it does not have any secondary impact in your revenue?
No, no, no, no.
There's just one impact and it directly adjusted in the profitability.
Yes, yes.
Understood. Understood. So that's it from my side. Thank you.
Thank you. The next question comes from Arihant from Bowhead. Please go ahead.
Hi, sir. My question would be, what was the realization from e-auction and from supply to NTPC, DVC separately? And what was the overall PBT from Talabira Coal Mine?
Okay. So again, last year, E-auction of around 2.5 million metric ton. This year, the coal sale through E-auction is 4.6 million metric ton. And to NTPC through MOU route, around 4.8 million is applied. And for DVC, they just started taking in the month of January. And the coal that is sent to our NTPL is 2.2 million metric ton. Coming to the sale value in the current financial year is INR 1,750 crore.
Against last year's figure of INR 1,410 crore. And coming to the PBT figure, the current year's profit before tax is INR 708 crore. Against last year's, it is INR 601 crore. But there was one CERC order impact of INR 292 crore. So net PBT for Talabira Mines is INR 416 crore. Against last year's, INR 601 crore.
Sir, can you please tell what was the average realization in first nine months from realization per ton from e-auction and from supply to NTPC and NTPL?
The average sale price of coal for the past nine months is INR 1652 per ton. Against last year's figure of INR 2537 per ton.
Okay. So this 1652 is from e-auction or the overall total e-auction plus supply to NTPC, NTPL?
It is through e-auction.
Okay. Got it. And what was our realization from supply to NTPC?
The realization from supply to NTPC is INR 787 crores.
I'm asking per ton?
Per ton. It is INR 1085.
INR 1,085. Okay. Thank you, sir. And another question is, are we facing any lignite availability issue or do you think we can face any lignite availability issue next year?
As of date, we are not having any lignite quantity issue. Already, all our units are operating at their full capacity. And with the substantial amount of land in our possession, we don't foresee any problem in the next financial year also. Some critical land parcel requirement is already being taken up aggressively. So we don't foresee any immediate loss of generation on account of lignite shortfall.
Okay. Thank you, sir. One question was regarding, we plan on participating in auctions for adding RE capacity. So I wanted to just understand, are we focusing only on plain vanilla solar wind project or are we targeting to participate in complex RE projects as well?
See, as of date, our capacity is 1.4 gigawatt and we are targeting to take it to 10 gigawatt. While the entire country is targeting doubling and tripling their capacity, we are targeting to increase our renewable capacity by seven times. We are open to all types of we are exploring all avenues for adding this capacity. Already, 2.5 gigawatt renewable capacity works are already in progress and we are exploring all the possibilities, including the JV which we formed with Rajasthan, the JV which we formed with Assam.
We are exploring various possibilities to have JV with the Odisha government also and many other states are also in line. We are exploring all the avenues where we can add renewable capacity to reach our target of 10 gigawatt by 2030.
Okay. Thank you, sir. Sir, and one last question. I wanted to know regarding 810 MW renewable projects, solar projects in Rajasthan. When will that come up? And also regarding Talabira Phase II thermal plant, when are we planning to do tender of that project?
This 810 MW won through competitive bidding process from Rajasthan, and the infrastructural developmental works are in the scope of RVNL, and the RVNL has already put a tender for that. They are in the final stages of award of the infrastructural works, and subsequently, the PPA will be signed, and we are ready with all the requirement to start the activities there.
Once we get the clearance from Rajasthan government for go ahead, we will start immediately and complete the project within one year period, and coming to the Talabira Phase II tendering, the Talabira Phase II, we applied for the various clearances in fast progress, so once that is done, we are expecting by June 2025, we'll be floating tender for that.
Okay. Thank you so much for the replies, sir.
Thank you.
Thank you. A reminder to all the participants, if you wish to register for a question, please press star and one on your touchtone phone now. Our next question comes from Somnath Sahar from BNK Securities India Private Limited. Please go ahead.
Thank you, sir, for the opportunity. Sir, you have just mentioned currently you don't face any challenge for lignite mining. But if I talk about the current quarter, I can see there is around 13% gap in your lignite production. So can you explain on that, the reduction on lignite mining?
No, no, no. There is no loss on account of lignite quantity in this one. In the current financial year, the last time which we highlighted the loss was June 2024. After, sorry, January 2024. So after January 2024, there is no loss on account of lignite availability.
Okay, so you are saying the current situation on lignite mining is okay. And you don't face any challenges in mining or land acquisition?
Exactly.
Okay. So secondly, if I refer to slide number 33, there are mentions on standalone basis that thermal generation will go up by 3.4 gigawatt till FY 2030. So can you help me with the breakup of the same? I mean, what you are accounting for? Apart from Talabira, what will come by that time?
See, Talabira, the first 800 MW will be we will be adding in March 2029. And with a gap of six months, we will be adding the other two units also. And the TPS-II second expansion, the 1 gigawatt capacity, that will be coming in the financial year 2030. So these are the thermal capacities we are going to add. But we also will be adding 3 into 125 MW by that 2030. So this is by 2030, our thermal capacity will increase from current 4.6 gigawatt to 10 gigawatt.
Okay, sir. Understood. Sir, another one question from the renewable side. Earlier, we have guided that 300 MW will come this fiscal only. Now it seems like that nothing will add in this fiscal. And also, we are targeting to get 10 gigawatt by 2030 longer term vision. But on execution, there's still lag, sir. So can you explain the delay? What caused the delay, sir?
See, as you know, this 300 MW we got under CPSC scheme, and the main condition for CPSC scheme is the modules of domestic nature need to be fitted in this plant of 300 MW, and as you know, there is a scarcity of modules in the country. That is the reason why not only NLCIL solar project, many other projects got delayed. We awarded this EPC contract to Tata Power, and they started their module manufacturing in the state of Tamil Nadu,
and they assigned the production around 80 MW for this project in the current financial year, and all other activities other than modules, they are complete, so for the entire 300 MW, all other activities, inverters, MMS structure, everything is ready. Only it is waiting for the modules.
So we are hopeful that in the current financial year, we will be able to add around 80 MWs capacity. And in the Q1 of the next financial year, the balance 220 MWs will be added.
That's helpful, sir. One last thing, sir. During the quarter at consolidated level, there's a one-time impact of INR 1,000 crore in one subsidiary NTPL. So if I may ask you the nature of that impact, what is the adjusted PAT for the quarter?
The adjusted PAT for the quarter, the impact for NTPL is INR 650 crores positive.
Okay. INR 650 crores.
Yes, yes. Thank you.
Thank you, sir.
Thank you. Next question comes from the line of Rabindranath Nayak from Sunidhi Securities. Please go ahead.
Am I audible, sir?
Yes, you're audible.
Yes, yes, and congratulations and probably a good set of numbers, sir. Sir, my question regarding this lignite transfer price, what is the transfer price lignite we are booking for the power generation in Neyveli right now?
Thank you for your encouraging words for the good numbers. The lignite transfer price at the Neyveli is INR 2,292.
Okay. Okay. Sir, what is the coal profit booked in this quarter?
The coal profit is booked mostly from Talabira. It is INR 306 crores booked in the current quarter, and total is INR 416 crores.
Okay. Okay. And sir, is there any loss we have booked in the Ghatampur plant in the last quarter?
It is a minimal INR 10 crores loss we booked there. Otherwise, the unit is performing exceedingly well.
Okay. Sir, what is the total under-recovery we have booked in this quarter?
The under-recovery booked this quarter is INR 218 crores on standalone basis.
This is largely due to the two plants that are undergoing refurbishment, right?
Exactly. Exactly.
Okay. Okay. Sir, regarding this Assam plant, sir, we actually whatever because my worry is that the solar intensity in that region particularly is low. So what is your comment? You can say that what would be the viability of this project in the state of Assam where the solar intensity is very low as compared to other regions? So your comment on that.
See, as you rightly said, the solar intensity is, if you compare with the other states like Rajasthan and Gujarat, lower, and accordingly, the CUF also will be lower, so that is the reason we pursued for the cost-plus tariff with Assam. So whatever plants we are installing there, the tariff will be determined by CERC on cost-plus basis. That is the reason we are going forward, and it is viable.
Okay. But as I'm asking in the context that around significant of renewable capacity still is asking from buyers. So on that context, whether the project will be viable because already the capacity is there. Instead of having the capacity in a low solar intensity place, we can supply the power from other places to Assam. So that is why I'm asking the viability of the project. Whether the project will be.
But the problem is that if we transmit solar power from high intensity zone like Rajasthan and Gujarat to Assam, the transmission system infrastructure itself is not sufficient. And it will be very costly. So considering all those things, the localized solar plants are always good. And because of the cost-plus tariff, financially, the project is viable and can generate revenue.
Okay. Sir, what is the average tariff difference we can expect from Assam? If at all, if we set up a plant there and also start generating, what is the tariff difference in Rajasthan and Assam?
Exactly, we cannot say. But in Rajasthan, the CUF can be ranging from almost 30%-32%. The plant which we are initiating in Rajasthan, 600 MW, there we are expecting CUF of 32%. Whereas in the state of Assam, with the latest modules also, it may cross 22%-25%. So exactly, it is very difficult to quantify the tariff difference. But there will be some difference in the tariff.
Okay. You mean to say that including the transmission price, the tariff will be viable for Assam?
Exactly. Exactly. Because it has to cross almost 1500 km if it has to come from Rajasthan. So it will be viable in the state of Assam.
Okay. I'm just talking not in Rajasthan. You are also planning to set up capacity in Odisha and other regions particularly. So will it be viable from those regions instead of Rajasthan?
No. See, from any region of the country, if it has to be transmitted to Assam, there will be huge transmission charges there. So the setting up of a solar plant there is, I think, a good option. And if we are getting the cost-plus tariff there, that is more better.
Okay. Okay, sir. Regarding this NTPC, sorry, NLC Green, what is the status on the QIP, sir? Or the IPO? What is the status there?
See, the major hurdle for that activity to move forward is exemption from Government of India for the bulk transfer of the assets from NLCIL to NIRL. And we got that tax exemption within a five-month period where the same thing happened earlier, almost one and a half to two years. So we are hopeful. We are taking all the activities in the fast-forward mode. And we are hopeful that by the Q1 of 2026 or the last quarter of the financial year 2025, we will be able to come up with the IPO.
Okay, sir. Thank you. And all the best, sir. Thank you.
Thank you.
Thank you. Before we take the next question, a reminder to all the participants. You may press star and one to ask a question. Our next follow-up question comes from the line of Arihant from Bowhead. Please go ahead.
Yes, sir. Sir, I wanted to know what would be our estimated regulated equity by 2030. And also, can you please provide a breakup of what was the under-recovery from TPS-II Expansion and TPS-II plant in nine-month FY 2025?
See, our current Regulated Equity is INR 9,383 crores. Around INR 5,900 crores in thermal and INR 3,450 crores in mines. And with the CapEx plan we are having and the capacity addition program we are having, the Regulated Equity by 2030 will be more than INR 19,000 crores.
Okay, sir. And what was the under-recovery from TPS-II expansion and TPS-II plant in nine-month FY 25?
In nine-month FY 25, the TPS-II expansion, the under-recovery is INR 300 crores. That is mainly because of the last three months where the modification activity is going on. And from TPS-II, the under-recovery is around INR 200 crores.
Okay. And sir, please can you clarify again regarding IPO timeline? When do you expect it to happen?
Last quarter of the financial year 2025-2026 or Q1 of 2026-2027.
Okay. Got it, sir. Just one last question, sir. When do you expect the JV company to be formed for two gigawatt solar project? By when do you think the company will be formed?
That is, the company formation is in the final stages. So anytime we can expect that, we can expect in the next one-month period.
Okay. And after that, you said that you will take 18 months to complete the projects when the company is formed.
15 to 18 months for adding 2 gigawatt capacity of renewables, and 36 to 40 months for adding 3 x 125 MW lignite-based power capacity.
Okay. Thank you so much, sir.
Thank you. The next follow-up question comes from the line of Aditya Velekar from Axis Securities. Please go ahead.
Yeah. Thanks for the opportunity again, sir. So if you can just come again on the pipeline for our renewable energy capacity addition for FY 25, 26, and 27.
Okay. See, as of date, we are having 1.4 gigawatt capacity, and every year, we are producing around 2.2 billion units of green power, and we are having a target to take this 1.4 gigawatt to 7 times, 10 gigawatt by 2030. To achieve this capacity addition target, we are having many projects in the pipeline. We are having this 300 MW in the Barsingsar near our Barsingsar plant, which is on the verge of commissioning because of the domestic modules. It is getting delayed, but by Q1 of the next financial year,
it will be completed. Then, 600 MW renewable capacity we are adding in the Khavda Solar Park in Gujarat. There, all the activities are in fast progress. We are expecting by the third quarter of the next financial year, this 600 MW will be commissioned.
And also works are in progress in 810-MW in Rajasthan, in Pugal district. And there, the infrastructural activities are in progress by RVNL. So once that is completed, then within the next 15 months, we will be able to add this capacity. So this capacity is expected in 26-27. And in addition to that, already we discussed about the two-gigawatt renewable capacity, which we are adding in the state of Rajasthan.
So this also, within the next 15 to 18 months, this capacity will be added. And in Assam, that one-gigawatt capacity, that also will be added in the next two years period. So almost 2.5-gigawatt projects are working in progress. And three-gigawatt works are already in pipeline. And that will facilitate us to reach to 10-gigawatt capacity by 2030.
That's useful, sir. Thank you very much. So what I heard in the call is for Assam, we have a cost-plus return. So is it only for Assam, right? Means for renewable energy, we are not in a regulated return, right, for other projects?
That is only for Assam. Otherwise, in all other projects, it is a competitive derived tariff. But particularly, whenever a renewable project is selected by NLCIL, we consider ROE of around 12%. And because that is calculated from conservatively taking all the margins, so almost we get a return of around 14% like what we get from our mines as well as thermal. So it's almost 14%-15% returns we get from renewables also.
Understood, sir. Thanks a lot. Thank you.
Thank you. The next question comes from the line of Prateek Singh from DAM Capital. Please go ahead.
Hey, hi. So just wanted to get a sense about the various diversification projects that we have been talking about. I think the first one to come was OB2SAND, phase I, II, and III. Have we started any pilot projects there or any kind of research studies, or they are still a few years away for us? And the same goes for critical minerals of around one million tons. That I think was our vision. How do we stand there?
This OB2SAND, there is a huge potential of M-Sand in the Neyveli area, so already one project worth 0.4 million metric tons is already ready for operation, and all the activities are completed, and we are on the verge of starting its commercial operation, and one OB2SAND of 1 million metric tons capacity is already awarded, and works are in fast progress. I think in the next six months period, we will be able to start the production from this 1 million metric tons also,
and coming to the critical minerals, as you know, to use our experience of almost 60 years in open-cast mining, we are interested in venturing into critical mineral block auction, and we participated in two rounds of critical mineral auction, but because of lesser number of participants in the bidding process, the bidding was annulled.
We are participating in the current critical mineral block auction. We are hopeful that we will be getting some critical mineral blocks in the current auction.
Thank you, sir, and anything on green hydrogen or battery energy, or they are still quite far away?
No, no, no, no. Already, NLCIL, as you know, NLCIL is the first company in the country to establish battery storage system in the state of Andaman, and that is successfully running, and earlier, Andaman was relying on diesel-based power generation. Now, the solar power generation, green power generation is facilitating the improvement in environment in Andaman, and coming to this green hydrogen, we are in the process of setting up a pilot project in the Neyveli.
Already, the green power requirement is met through the solar plant already commissioned for MW, so we are in the process of procurement of electrolyzer, and we are hopeful that the earliest we will be able to establish the pilot project for green hydrogen.
Thank you, sir. And the last one, just wanted to get a sense as to when we say our overburden sand, what kind of sand is it? Like sand can be used for, I understand, glass, automobile glass, or even solar glasses. So is there any specific?
See, it is an M-Sand. So for construction purpose, the normal sand is used from the river beds. And there is a scarcity of that type of sand that is affecting the construction industry in the country. This M-Sand is converting the overburden by following the washing process. So this overburden consists of the sand of around 50%-60%. So that is separated. And that can be used for the construction purpose.
And this is having huge demand. So this will also reduce the environmental impact because this will replace the river sand. And this is having huge demand in the market.
Understood. So we will be targeting the construction sector, basically.
Exactly.
Understood. Thanks. Thanks a lot for answering my questions.
Thank you. Participants, you may press star and one to ask a question. Our next follow-up question comes from Somnath Sahar from BNK Securities. Please go ahead.
Thanks for the opportunity again, sir. Can you please help me with the breakup of regulated equity currently on standalone versus your NTPL and NUPPL?
Regulated equity?
Yes, sir.
Okay.
How much is currently on standalone basis?
Our total regulated equity in thermal is 5,931 crores.
Okay.
This is minus NUPPL. Once NUPPL is adjusted, just give me a minute.
Sure, sir.
Standalone Neyveli total lignite thermal regulated equity is 3,983.
Okay. And remaining for NTPL?
Yes, yes, yes.
Thank you very much, sir.
Okay.
Thank you. Is there any further questions from the participants? I now hand the conference over to the management for closing comments.
I thank all the investors for their outstanding support to the company. And I thank all the participants in today's investors' call for giving encouragement to the team NLCIL. And at the same time, giving valuable suggestions. I assure that whatever commitments we have given and the timelines we have given, we will be putting all the efforts to ensure that these commitments are met and increase the returns to the investors. Thank you. Thank you all.
Thank you. On behalf of DAM Capital, that concludes this conference. Thank you for joining us. You may now disconnect your lines.