Low PE, High ROCE Navratna PSU Signs JV to Develop 1,080 MW Thermal Power Plant in Odisha

On Thursday, Indian equity benchmarks traded higher, with the benchmark Nifty 50 index rising 0.68 per cent to 24,043.85. Amid the broader market strength, National Aluminium Company (NALCO) share price traded at Rs 345.85, down 1.12 per cent from the previous close after the company announced a joint venture with NLC India Limited to develop a 1,080 MW captive thermal power plant in Odisha.

NALCO, NLC India Form Joint Venture

National Aluminium Company Limited (NALCO) and NLC India Limited (NLCIL) have signed a Joint Venture-cum-Shareholders' Agreement to establish a 50:50 joint venture company for developing a 4×270 MW (1,080 MW) brownfield captive thermal power plant at Anugola, Odisha. The agreement was signed in New Delhi on July 8, 2026, in the presence of Union Minister of Coal and Mines G. Kishan Reddy.

The project will be developed in phases within NALCO's existing captive power plant premises. The joint venture company will be incorporated under the Companies Act, 2013, with its registered office in Chennai and corporate office in Bhubaneswar.

National Aluminium 25-Year Power Supply Agreement

Under the agreement, the joint venture will enter into a 25-year Power Purchase Agreement (PPA) with NALCO for 100 per cent of the electricity generated from the project under Section 62 of the Electricity Act, 2003, ensuring long-term captive power availability for the aluminium producer.

The venture will also execute a long-term Fuel Supply Agreement with NLC India for coal at Coal India notified prices. Coal will be supplied, including from NLC India's Machhakata coal mine in Odisha, located near the project site, supporting long-term fuel security and logistics efficiency.

Supports Aluminium Expansion

The proposed thermal power project is aligned with NALCO's ongoing 0.5 million tonnes per annum aluminium smelter expansion at Anugola, which is targeted for commissioning during FY2031. The expansion is expected to require around 800 MW of additional captive power, which the new project is designed to meet.

In addition, NALCO plans to source 200–250 MW of firm renewable energy (RE-RTC) to meet Renewable Consumption Obligation (RCO) requirements, with NLC India supporting the company through long-term PPAs or group captive arrangements from its renewable energy portfolio.
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Strategic Collaboration Between Two Navratna PSUs

The latest agreement formalises the Memorandum of Understanding (MoU) signed by the two companies in February 2026, converting it into a definitive joint venture structure. The partnership represents a strategic collaboration between two Navratna Central Public Sector Enterprises, aimed at strengthening captive power infrastructure while supporting NALCO's downstream aluminium expansion and ensuring long-term coal security.

About National Aluminium Company

National Aluminium Company Limited (NALCO) is a Navratna public sector enterprise engaged in the mining of bauxite, alumina refining, aluminium smelting and power generation. The company operates integrated aluminium manufacturing facilities and supplies products to domestic and international markets. Further, the company currently trades at a price-to-earnings (P/E) ratio of 10.9 and has a Return on Capital Employed (ROCE) of 39.6 per cent, reflecting strong capital efficiency.

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Disclaimer: The article is for informational purposes only and not investment advice.