- 11 Sep 2024
- ICICI Securities
COAL INDIA PLANNING AGGRESSIVE CAPEX SPEND IN THERMAL POWER GENERATION DOMAIN
News: As per media sources, Coal India is planning to invest about ~₹67,000 crores (~$8 billion) in constructing coal-fired power plants near to its coal mines, mainly in Odisha. The company has secured approval of 4.7 gigawatts of generation over the next 6 to 7 years, with an additional 2 gigawatts, which is under the discussion process.
Views: This investment aligns with the company’s objective to broaden its revenue base by utilizing its core resources, coal. In FY24, the company ventured into Thermal Power Generation sector, investing in projects like the 2x800 MW through Mahanadi Basin Power Ltd. Furthermore, it has entered into a MOU with Rajasthan Rajya Vidyut Utpadan Nigam Limited (RRVUNL) to explore potential ventures totalling up to 4100 MW, combining both renewable and thermal projects. With long term investment horizon, we maintain positive on Coal India driven by the company’s ambitious goal of achieving 1000 MT of coal production by FY26, investments in new technology domains like coal gasification, inexpensive valuation, and healthy dividend yield.
Impact: Neutral