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Moneycontrol.com >> Message Board >> View Messages >> Neyveli Lignite
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Neyveli to invest Rs 1,000 cr more (1)   05-Jul-08 08:39Tracked by (0)  
Posted by:   latikav on ( 05-Jul-08 08:39 )
Price : BSE: Rs 96.45 ( 3.43 % ), NSE: Rs. 96.40 ( 3.32 % )
Public sector lignite-based power generation company Neyveli Lignite Corp plans to add around Rs 1,000 crore over the next two years to complete its ongoing expansion programme.

This is over and above the company’s expansion lined up in power generation and mining, which is currently under formulation stage.

Research analysts Shankar K and Abhineet Anand in June 26 report on Neyveli Lignite said, “With cash of over Rs 4,800 crore and power bonds of Rs 825 crore, the company is in a strong position to support its expansion plan. The company expects to increase its net profit of Rs 1,150 crore to Rs 1,400 crore by the financial year 2011.”

A source close to the company said the estimated investment required over the next two years is Rs 950 crore, but it might as well go beyond Rs 1,000 crore.

Over the next two years Neyveli Lignite plans to add another 750 mw to its existing capacity of 2490 mw. Out of this, 250 mw will come up at Barsingar and 500 mw at its Neyveli-based thermal power station II.

Besides, the company plans to increase its mining capacity by 6.5 million tonne per annum (mtpa) by financial year 2010 from the current 24 mtpa.

A source close to the company said Neyveli Lignite’s expansion projects have been delayed due to across the board rise in costs. “As a result of this, the 500 mw power plant at Neyveli has been delayed by six months,” he said.

The Neyveli-based thermal power station II, whose expansion unit I was expected to be commissioned by February 2009, will now be complete by August 2009. Similarly, the expansion unit II will be complete by December 2009 from the previous schedule of June 2009. The Barsingar project is on schedule.

“While project cost for the Barsingsar power plant has increased by around 45% to Rs 1,626 crore, costs for thermal power station II have risen by almost 20%,” the analysts said.

The Barsingar project earlier had an estimated investment of Rs 1,114 crore and the Neyveli project, which will now cost Rs 2,453 crore, was earlier estimated at around Rs 2,031 crore.

However, official confirmation was not received for the same as company officials were not available for comment on Friday.

On a long-term basis, Neyveli Lignite plans to add another 8,750 mw and augment its mining capacity by 46.3 mtpa. “Since they are in the formulation stage, we have not zeroed in on any time for our mega expansion to complete. And the current plans may even change,” the source said.

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