Neyveli Lignite Corp. (NLC), established in November 1956, is the largest industrial complex with mining, power, fertiliser and briquetting (the process of converting raw lignite into solid fuel) and carbonizing plants all at one place. Production of lignite commenced from 1961. NLC has the only lignite based thermal power station in Asia, and is the first pithead thermal power station in the country. Government of India provided Miniratna status to Neyveli Lignite Corporation Limited. The Mini Ratna Status enables an Enterprise to exercise enhanced autonomy and higher delegation of powers. NLC with ambitious expansion programmes, this Mini Ratna Status would enable the Company to accelerate its expansion activities.

Products & Services-

Neyveli Lignite Corporation is basically involved into Lignite excavation & power generation business. Company's power supply mainly used by southern states due to geographical advantage. Neyveli Lignite Corporation is India's largest listed integrated power generation company with a total installed capacity of over 2070 MW. Its plants are fully integrated with lignite (17 mn tpa) drawn from its own lignite mines. It also has a 129,200 tpa urea plant and a 262,000 tpa briquetting and carbonization plant. NLC feeds the entire power generated from TPS - I to the Tamilnadu Electricity Board. Electricity boards of southern states share power generated from TPS- II. NLC calculates its tariff based on a single power tariff method as against dual power structure of independent power producers. Neyveli Lignite Corporation has excellent technical skills in consultancy services for the renovation of old Power Stations.

Neyveli Lignite Corporation has accorded the high priority to ecology development and pollution control. Continuous monitoring in respect of liquid/gaseous effluents control is carried out at units and treated effluents meet all MINAS and the statutory requirements. To improve the environment the Corporation has a planned a forestation programs, and reclamation of waste land development to control pollution free air in Neyveli as a regular activity of the Corporation.

Valuation

At CMP, stock is trading at 11.37 P/E multiple of its FY2011 estimated earnings. We recommend investors to "BUY" Neyveli Lignite Corporation limited with medium to long term investment horizon.