NLC India Limited (513683) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to NLC India Q3 FY '25 Earnings Conference Call. [Operator Instructions] 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, Raghav. Good evening, everybody. On behalf of DAM Capital Advisors, I would like to welcome you all to the Q3 and 9-month FY '25 earnings call on NLC India Limited. Today, we have with us Shri M. Prasanna Kumar, 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 9 months ended December 31, 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. I, Prasanna Kumar Motupalli, Chairman and Managing Director of NLC India Limited. And joining with me are Dr. Suresh Chandra Suman, Director, Mines and Director of Planning and Project Traditional in-charge; Shri. Samir Swarup ji, Director of Human Resources; Shri. M. Venkatachalam ji, Director Power; and Dr. Prasanna Kumar Acharya ji, Director, Finance, along with senior management of the company. Before the interaction, I would like to brief on the major highlights and performance of NLCIL during the quarter and 9 months ended December 31, 2024. NUPPL, Ghatampur Thermal Power Station Unit #1 of 660 megawatts successfully started with commercial operations by which NLCIL Group's installed power generation capacity increased from 6,071 megawatts to 6,731 megawatts. Also, this is the first unit of ultra-supercritical technology of NLCIL Group. Coal mine development and production agreement, CMDPA executed between nominating authority of Ministry of Coal and NLCIL for New Patrapara South coal mine project of 12 million metric tonne per annum. With this, the total cumulative capacity of NLCIL Group cost 100 million metric tonnes. NLCIL signed a JV agreement with RVUNL for setting up of 3 x 125-megawatt lignite-based thermal power station in the state of Rajasthan, and also NIRL, the wholly owned subsidiary of NLCIL signed a JV agreement with RVUNL 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 projects in Assam of almost 1 gigawatt capacity. NLCIL has been recognized as one of the best performer under Special Campaign 4 in the new initiative best practice category and also won first prize in the Swachhata 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 crores that has exceeded the annual target of financial year 2024, '25. Ministry of Finance through a Gazette of India has granted capital gains tax exemption under Income Tax Act for the transfer of renewable energy assets from NLCIL to NIRL, a wholly owned subsidiary of NLCIL. NLCIL received 4 5-star rating awards for Mine 1, Mine 1A and Barsingsar and Talabira for the performance base year 2022, '23 from Honorable Ministry of Coal and Mine at New Delhi. With this, the total 5-star ratings received by NLCIL crossed 17. Ministry of Coal accorded approval for the revised cost estimate of INR 21,780 crores for 3 x 360-megawatt Ghatampur Thermal Power project of NUPPL. For the financial year 2024/'25, NLCIL Board has approved payment of interim dividend at the rate of INR 1.5 per share. Coming to the fiscal performance of 9 months ended December 2024. NLCIL achieved lignite production of 171.35 lakh metric tonne with 5.23% growth as compared to 162.83 lakh metric tonne in the 9 months ended the financial year '23, '24. NLCIL achieved all-time highest ever coal production of 115.16 lakh metric tonne with almost 40% growth as compared to 82.19 lakh metric tonne in the month of -- in the 9 months ended financial year '23, '24. This is also all-time highest-ever lignite plus coal production for the company. Achieved gas power generation of 20.568 billion unit with 4.71% growth as compared to 19.643 billion unit, 9 months ended financial year '23, '24. This includes RE power generation of 1.579 billion unit. Coming to the financial performance of 9 months ended December 2024, all-time highest revenue from operations of INR 11,445 crores as against INR 9,458 crores in the corresponding period of the previous year, registering a growth of 21%. All-time highest total income of INR 12,909 crores as against INR 9,912 crores in the corresponding period of the previous year, registering a growth of 30%. All-time highest profit after tax of INR 2,245 crores, as against INR 1,754 crores 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 this year. I hope the same would continue in the future also. Thank you. Thank you, all.

Sir, should we open the floor for questions?

Yes, go ahead.

[Operator Instructions] Our first question comes from Mohit Kumar from ICICI Securities.

Congratulations on a very good quarter. My first is -- sir, it is heartening to see NLC doing a very good work in thermal, renewables and winning new coal mines. My first question is, sir, what are the under recovery on the standalone and consolidated basis in 9 months? And what is the status of NLC that 500 megawatts, 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 9 months of INR 725 crores, this year, under recovery is INR 517 crores. And standalone basis against last year INR 571 crores, this is -- this year, around INR 500 crores.

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 improvement -- 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 the 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 by -- 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. Second question is, what is the status of the 1-gigawatt NLC power plant, I think you're looking to start the work, is the -- have you tendered this power plant? Or can we expect this to be tendered out in the next 6 months?

This 1 gigawatt, the 2 x 500-megawatt in Neyveli, we got exemption permission from Central Electricity Authority for going for subcritical lignite. So we are in the -- 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. My last question is on the notes 9 to the account, notes 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, I think, notes 9, CERC issued a tariff order on August 1, 2024. Is it fair to say that impact is around INR 400 crores on the profit because of this order?

Okay. You are talking about -- just wait, please.

The Notes #9 of the result.

The consolidated impact on the revenue is around INR 1,576 crores and impact -- positive impact in PBT is INR 934 crores and PAT is INR 752 crores on consolidated basis for 9 months.

No, no, no. My question was on -- for your quarter. I think it talks about only 1 tariff order, right, which was issued for the NTPL, subsidiary company, correct?

Yes, yes, yes.

Asking an impact per quarter -- for this quarter, not for 9 months.

It's having impact of -- a positive impact of INR 647.51 crores.

Next question comes from Aditya Welekar from Axis Securities.

So congrats for the great set of numbers. Sir, my question is with regards to under recovery. And in the last call, we said that full year under recovery will be in the range of INR 450 crores. And so what is that amount would be now? And the drop in PLF at the TPS-II expansion and NTPL, as we progress on that boiler issue, do we expect any improvement for the -- on the basis of PLF for these 2 units going forward? And what will be the final under recovery you can expect for...

Thanks for your encouraging words. And regarding under recovery, there is a substantial improvement in the under recovery of NTPL. You were asking NTPL also, the last financial year, it was more than INR 154 crores. But this financial year, it is almost nil, it's only INR 7 crores, and this will continue. And coming to the under recovery on a consolidated basis against last year, INR 725 crores it's now INR 517 crores. And we are expecting to land at around INR 600 crores by the end of this financial year. And 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 back to the...

Sorry to interrupt. Aditya sir, we are losing your audio in between.

Am I audible now?

Yes, you're audible.

Coming to Ghatampur, Unit 2 and Unit 3, the earlier dates were December and March '25, so are we sticking to that? And same for Pachwara coal block, is it on track for March '25? And lastly, on this new Patrapara coal mine, if you can share some time line when it will be developed.

This capacity coming to Pachwara south coal block earlier we were targeting for March '25. [Technical Difficulty]

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. [Technical Difficulty] Ladies and gentlemen, we have the line for the management reconnected. Please go ahead, sir.

So can I continue the answer to the question?

Sure.

So there were 3 questions. One was about Pachwara South Coal Block, the earlier expected production was March 2025. But there was some delay in the forest clearance Stage 1. That's why now the revised production target is July '25. We are in advanced stage of getting the forest clearance of Stage 2. So we are hopeful that by July '25, we'll be starting production. MDO and all the things are in position, and we'll be starting production from July. Coming to Ghatampur, the earlier target for Unit #1 was December that we completed in December, and the unit is performing exceedingly level with more than 98% availability. And Unit 2, we are targeting May 2025 and Unit 3, October 2025. So before October 2025, all the 3 units will be declared. Coming to new Patrapara South Coal Block, we got it in commercial auction. It is having 12 million metric tonne per annum capacity. And the advantage with this block is that this new Patrapara block shares its boundary with Machhakata. So we will be getting advantage of scale. And the government set the target is 55 months, but we are targeting for product -- starting production in 36 months. So by February 2028, we'll be starting production from new Patrapara.

That's very helpful, sir. Just one last question. So if you can just share the same time lines for our Rajasthan joint venture for 3 x 125 thermal plant and 2,000-megawatt renewable plant and 1,000-megawatt solar plant in Assam, so for this...

We signed that joint venture agreement with Rajasthan government for both 3 x 125 megawatt lignite-based power station and 2 gigawatts of renewable capacity. This 3 x 125 megawatt, the activities are on, but the JV formation is in the final stages. Once that is done, then we will go for tendering. And we will be completing the project within the next 36 months -- 36 to 40 months. And these 2 gigawatts of renewable capacity, we are already in the process of finalizing the location. So within next 18 months, once the joint venture is formed, within the next 18 months, we'll be adding the entire 2 gigawatts capacity. Similarly, with the state of Assam, we signed a joint venture agreement with them for adding capacity of 1 gigawatt. There also with 12 to 15 months, we will be adding the 1 gigawatt capacity. Already land is identified for substantial capacity addition.

[Operator Instructions] The next question comes from Rabindra Nath Nayak from Sunidhi Securities. 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.

Sir, mine is more of a bookkeeping question. So you look at the financials of this quarter, there is a movement in regulatory deferral income of negative INR 789 crores, post which our PAT comes to around INR 696 crores. Sir, for our reference, do we -- for a profitability perspective, we look at the PAT after considering that movement, right? So our normalized PAT would be INR 696 crores. Is that the correct way to look at it?

Yes, yes.

And sir, in the same context. So I just wanted to understand. So from a last conference call, our understanding was that for any favorable or unfavorable orders, there are generally 2 impacts. One impact is in sales, and until the level the PPA is upgrade. And post that, it is adjusted from the regulatory deferral movement for the bank. So is that understanding is correct? And if not, can you share the view on it that how does that bookkeeping work?

It is correct only, but only some adjustments is required if the regulatory provision is not sufficient to the requirement of the order. So normally, on a conservative basis, we used 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 is correct.

So in this quarter's context, we are -- there is a negative INR 789 crores impacts. So to -- approximately a similar amount would be inflated in -- increased in your revenue. Is that the way to look at it?

The current quarter you were telling or 9 months?

For the current quarter. So your current quarter regulatory deferral movement is INR 789 crores. So would that number be then included as a positive impact in the revenue. Is that how it works?

One minute. This is the adverse impact in the -- this is adverse impact in the profitability.

Okay. So -- and so it does not have any secondary impact in your revenue?

No, no, no.

No, no.

So there's just one impact, and it directly adjusted in the profitability.

Yes, yes.

The next question comes from Arihant Baid from Bowhead.

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?

So against last year's e-auction of around 2.5 million metric tonne, this year, the coal sale through e-auction is 4.6 million metric tonne. And 2 -- 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 at 2.2 million metric tonne. Coming to the sale value in the current financial year is INR 1,750 crores against last year's figure of INR 1,410 crores. And coming to the PBT figure. The current year's profit before tax is INR 708 crores against last year's INR 601 crores, but there was 1 CERC order impact of INR 292 crores. So net PBT for Talabira mine is INR 416 crores against last year's INR 601 crores.

Sir, can you please tell what was the average realization in first 9 months from, realization per tonne from e-auction and from supply to NTPC and NTPL?

So the average sale price of coal for the past 9 months is INR 1,652 per tonne against last year's figure of INR 2,537 per tonne.

Okay. So this INR 1,652 is from e-auction or the overall total e-auction plus supply to NTPC, NTPL?

It is through e-auction.

And what was our realization from supply to NTPC?

The realization from supply to NTPC is INR 787 crores.

Sir, I'm asking per tonne.

Per tonne, it is INR 1,085.

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 on 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 position, we don't foresee any problem in the next financial year also. Some critical land parcel requirement is already taken or being taken up aggressively. So we don't foresee any immediate loss of generation on account of lignite shortfall.

Okay. And one question was regarding the -- we plan on participating in auctions for adding RE capacity. So I wanted to just understand like are we focusing only on plain vanilla solar wind projects? Or are we targeting to participate in complex RE projects as well?

See, our -- as on date, our capacity is 1.4 gigawatt. And we are targeting to take it to 10 gigawatt, while entire country is targeting doubling and tripling their capacity, we are targeting to increase our renewable capacity by 7x. So we are open to all types of -- we were exploring all revenues 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 and we are exploring various possibilities to have JV with the Odisha government also and many other states are also in line. So we are exploring all the avenues where we can add renewable capacity to reach our target of 10 gigawatt by 2030.

Sir, and one last question. I wanted to know regarding 810-megawatt renewable projects, solar project in Rajasthan, when will that come up? And also regarding Talabira Phase 2a and Phase 2 thermal plant, when are we planning to do tender of that project?

This 810-megawatt won through competitive bidding process from Rajasthan. And the infrastructural developmental works are in the scope of RVNL. And the RVNL has already floated tender for that, and they are in the final stages of award of the infrastructure works and subsequently, the PPA will be signed. And we are ready with all the requirements 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 1 year period. And coming to the Talabira Phase 2 tendering. The Talabira Phase 2, we have applied for various clearances, in fast progress. So once that is done, we are expecting by June 2025, we'll be floating tender for that.

[Operator Instructions] Our next question comes from Somnath Saha from B&K Securities India Private Limited.

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, I mean year-on-year loss on lignite production. So can you explain on that reduction on lignite mining?

No, no, no. There is no loss on accounts of lignite quantity in this one, in the current financial year. The last time, which we highlighted the loss was June '24 -- sorry, January '24. So after January '24, there is no loss on account of lignite availability.

So you're saying the current situation on lignite mining is okay and you don't face any challenges in mining or land acquisition?

Exactly.

So secondly, if I refer to Slide #33, you mentioned on a stand-alone basis, thermal generation will go up by 3.4 gigawatts till FY 2030. Can you help me with the breakup of the same, and what you are accounting for Talabira, what will come by that time?

The Talabira, the first 800-megawatt will be -- where we will be adding in March 2029. And with the gap of 6 months, we will be adding the other 2 units also. And our -- 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 x 125 megawatt by 2030. So this is by 2030, our thermal capacity will increase from current 4.6 gigawatt to 10 gigawatt.

Sir, another one question from the renewable side. Like earlier, we have guided that 300 megawatt will come this fiscal only. And 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 an execution, there's still less. So can you explain the delay, what's causing the delay, sir?

See, as you know, this 300 megawatt, we got under CPSU scheme. And the main condition for CPSU scheme is the modules of domestic nature need to be fitted in this plant of 300 megawatt. And as you know, there is a scarcity of modules in the country. That is the reason why not only an NLCIL solar project, many other projects got delayed. We awarded this contract to -- EPC contract to Tata Power. And they started their module manufacturing in the state of Tamil Nadu, and they assigned the production around 80 megawatts for this project in the current financial year. And all other activities other than modules, they are complete. So for entire 300 megawatt, 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'll be able to add around 80-megawatt capacity. And in the first quarter of the next financial year, the balance 220-megawatt will be added.

One last thing, sir. During the quarter, at console level, there's a onetime impact of INR 1,000 crores in your 1 subsidiary NTPL. So if I may ask you the rate of that impact, what is your adjusted PAT for the quarter?

The adjusted PAT for this quarter, the impact for NTPL is INR 650 crores first 2.

INR 650 crores?

Yes, yes.

Next question comes from the line of Rabindra Nath Nayak from Sunidhi Securities.

Yes. And congratulations for the good set of numbers, sir. Sir, my question regarding this lignite transfer price, what is the transfer price lignite we were booking for the power generation in Neyveli right now?

Thank you for your encouraging words for the good numbers. And the lignite transfer price at Neyveli is INR 2,292.

Sir, what is the coal profit booked in this quarter?

The coal profit we booked mostly from Talabira, INR 306 crores is booked in the current quarter and total is INR 416 crores.

And sir, is there any loss we 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, okay, okay. Sir, what is the total under-recovery we have booked in this quarter?

The under-recovery booked this quarter is at INR 218 crores on a stand-alone basis.

This is largely due to these -- the 2 plants that's undergoing refurbishment, right?

Exactly. Exactly.

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 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, it is 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.

Because I'm asking in the context that around significant of renewable capacity is still 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 solar -- low solar intensity in a place, we can supply the power from other side, other places to Assam. So that is why I'm asking the viability because this 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.

Sir, what is the average tariff difference you can expect from Assam, if at all, 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% to 32%. The plant, which we are envisaging in Rajasthan, 600 megawatt, there we are expecting CUF of 32%. Whereas in the state of Assam with the latest modules also, it may cross 22% to 25%. So exactly, it is very difficult to quantify this tariff difference, but there will be some difference in the tariff.

You mean to say including the transmission price, the tariff will be viable for Assam?

Exactly, exactly. Because it has to cross almost 1,500 kilometers, if it has to come from Rajasthan. So it will be viable in the state of Assam.

I'm just talking not in the Rajasthan, if 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 is -- it has to be transmitted to Assam, there will be huge transmission charges will be there. So the setting up of solar plant there is I think good option. And if we are getting the cost plus tariff there, that is more better.

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 hurdles are that activity to move forward is exemption from government of India for the bulk transfer of the assets from NLCIL to NIRL. And that -- we got that tax exemption within 5 months period where the same thing happened earlier, almost 1.5 to 2 years. So we are hopeful -- we are taking all the activities in the fast forward mode, and we are hopeful that by -- in the first quarter of -- first quarter of '26 or the last quarter of the financial year '25, we'll be able to come up with the IPO.

[Operator Instructions] Our next question follow-up comes from the line of Arihant from Bowhead.

Sir, I wanted to know what would be our estimated regulated equity by 2030? And also, can you please provide breakup of what was the under recovery from TPS-II expansion and TPS-II plant in 9 months FY '25? .

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.

And what was the under recovery from TPS-II expansion and TPS-II plant in 9-month FY '25?

In 9 months FY '25, the TPS-II expansion, the under recovery is INR 300 crores. That is mainly because of the last 3 months where the activity -- the modification activity is going on. And from TPS-II, the under recovery is around INR 200 crores.

And sir, please, can you clarify again regarding IPO time line, will it -- when do you expect it to happen?

Last financial -- last quarter of the financial year '25, '26 or first quarter of '26, '27.

And just one last question, sir, when do you expect the JV company to be formed for a 2 gigawatt solar project? By when you think the company will be formed?

That is -- the company formation is in the final stages. So any time we can expect that, we can expect in next 1 month period.

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 megawatt lignite-based power capacity.

The next follow-up question comes from the line of Aditya Welekar from Axis Securities.

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 on date, we are having 1.4 gigawatt capacity. And we are -- every year, we are producing around 2.2 billion units of power. And we are having a target to take this 1.4 gigawatt to 7x 10 gigawatt by 2030. To achieve this capacity addition target, we are having many projects in the pipeline. We are having this 300-megawatt 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 first quarter of the next financial year, it will be completed. Then 600-megawatt renewable capacity, we are adding in the Khavda Solar Park in Gujarat, where all the activities are in fast progress. We are expecting by the third quarter of the current -- next financial year, this 600-megawatt will be commissioned. And also works are in progress in 810-megawatt 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'll be able to add this capacity. So this capacity is expected in '26, '27. And in addition to that, already, we discussed about the 2 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 1 gigawatt capacity, that also will be added in the next 2 years period. So almost 2.5 gigawatt projects are work in progress and 3 gigawatt works are ready in pipeline and that will facilitate us to reach to 10 gigawatt capacity by 2030.

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 the regulated returns, 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% to 15% returns we get from renewables also.

Next question comes from the line of Prateek Singh from DAM Capital.

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 OB to sand Phase 1, 2, and 3. Have you 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 1 million tonnes that I think was our vision. How do we stand there?

This OB to sand, there is a huge potential of m-sand in the Neyveli area. So already 1 project about 0.4 million metric tonne is already ready for operation and all the activities are completed, and we are on the verge of starting with a commercial operation. And one OB to sand of 1 million metric tonne capacity is already awarded and works are in fast progress. I think in next 6 months period, we will be able to start the production from this 1 million metric tonne 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 to entering into critical mineral block auction, and we participated in 2 rounds of critical mineral auction. But because of lesser number of participants in the bidding process, the bidding was annulled. So we are participating in the current critical mineral block auction. And we are hopeful that we'll be getting some coal critical mineral block in the current auction.

And anything on green hydrogen or battery energy or they are still quite far away?

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 of a pilot project in the Neyveli. Already, the green requirement is met through the solar plant already commissioned 4 megawatts. 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.

And the last one, I just wanted to get a sense as to when we say overburden to 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 target...

It is 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% to 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 a huge demand in the market.

Understood. So we'll be targeting construction sector, basically?

Exactly.

[Operator Instructions] Our next follow-up question comes from Somnath Saha from B&K Securities.

Can you please help me with the breakup of regulated equity currently on stand-alone versus your NTPL and NUPPL?

Regulated equity?

Yes, sir. How much is currently on a stand-alone basis?

In our total regulated equity in thermal is INR 5,931 crores, and this is minus NUPPL. Once NUPPL is -- just give me a minute. Stand-alone Neyveli total lignite thermal regulated equity is INR 3,983 crores.

Okay. And remaining is for NTPL?

Yes.

Thank you. As there are no 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 assume that whatever commitments we have given and the time lines we have given, we'll 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.