Indian Oil Corporation Ltd. makes a corporate announcement

The disclosed project outlay is Rs 755 Crores for the 100 MW turnkey wind project, equivalent to Rs 7.55 Crores per MW on a derived basis. The order covers turbine supply, engineering, procurement and construction, project execution, and post-commissioning O&M; therefore, Rs 755 Crores is best treated as the total contract value, not necessarily pure capitalised project cost. ^[1]

Alignment with IndianOil’s renewable-energy plans

• FY25 baseline and long-term target: The FY25 investor presentation reported an existing renewable-energy portfolio of 252.1 MW and a target of 31 GW by 2030. It also identified Terra Clean Ltd. as the vehicle for developing 5.3 GW of renewable capacity. ^[2]
• FY26 position: The FY26 Annual Report reported a renewable portfolio of 258.06 MW as of the year, comprising 167.60 MW of wind and 90.46 MW of solar; 5.95 MW of solar capacity was commissioned during FY26. ^[3]
• Terra Clean execution pipeline: The FY26 Annual Report stated that development had commenced for 1 GW through Terra Clean, with preparatory work underway for an additional 4.3 GW—together representing 5.3 GW of planned/developing capacity on a derived basis. ^[4]

What the 100 MW means

• Against the 5.3 GW Terra Clean plan: 100 MW represents approximately 1.89%, derived from 100 MW divided by 5,300 MW.
• Against the broader 31 GW target: It represents approximately 0.32%, derived from 100 MW divided by 31,000 MW.
• Against the installed portfolio: It is sizeable relative to the operating base—approximately 39.67% of the FY25 portfolio of 252.1 MW and 38.75% of the FY26 portfolio of 258.06 MW, both derived comparisons. ^{[2] [3]}

Analyst read: The project is strategically consistent with IndianOil’s renewable-energy expansion, but it is only a small increment against the company’s multi-gigawatt ambitions. It is material relative to the existing installed base, yet should not be counted as FY25 or FY26 commissioned capacity: the 100 MW order was announced in September 2026, after FY26 year-end, and no commissioning date is disclosed. The order announcement also does not establish whether this capacity is included within Terra Clean’s 5.3 GW programme; that scope linkage remains unreported.

The project-specific accounting treatment cannot be confirmed as either direct IOCL-owned PPE or a pure long-term PPA from the reported disclosures. More importantly, the renewable programme appears to use multiple structures: the 650 MW round-the-clock requirement is being progressed through IndianOil NTPC Green Energy Pvt. Ltd. (INGEL), a joint venture, while the larger 1 GW development programme is being pursued through wholly owned subsidiary Terra Clean Ltd. ^{[5] [6]}

What is established

• IOCL reports a renewable portfolio of 258.06 MW as of FY26, comprising 167.60 MW of wind and 90.46 MW of solar, which generated 371.40 GWh during the year. ^[5]
• INGEL is progressing renewable capacity to meet refinery expansion requirements and was stated to be on course to commission 50 MW during the year; this sits within the broader 650 MW round-the-clock renewable power requirement. ^[3]
• Terra Clean, IOCL’s wholly owned subsidiary, has commenced pre-project work for 1 GW of renewable capacity and secured approvals for a further 4.3 GW. ^[3]
• IOCL’s accounting policy states that assets under construction are carried as capital work in progress, construction-period expenses and eligible borrowing costs are capitalised, and PPE is subsequently carried at cost less accumulated depreciation and impairment. ^{[7] [7] [7]}

The annual report does not report project-level capex ownership, PPA terms, useful lives, commissioning dates, or a renewable-specific depreciation and ROCE forecast. Its segment reporting places power generation within “Other Business Activities”, but does not separately disclose renewable depreciation or renewable ROCE. ^{[8] [9]}

Accounting impact by structure

A PPA should not automatically be treated as off-balance-sheet: contract terms would need to be examined for any identified-asset, control or lease-like features. Likewise, the existence of INGEL as a JV means the relevant choice is not necessarily limited to “IOCL PPE versus PPA”.

Implication for renewable ROCE

The current evidence supports no defensible numerical projection for renewable-segment depreciation or ROCE. The key variables are:

1. Who owns the generation asset—IOCL, INGEL, Terra Clean or another project company; 2. Whether the project is consolidated or equity-accounted; 3. The amount capitalised and commissioning date; 4. Useful life and depreciation method; 5. PPA tariff, plant-load factor and operating costs; and 6. Whether “capital employed” includes project debt and CWIP.

If the project is direct PPE, expect a front-loaded ROCE drag during construction and early operations because the capital base precedes full earnings. If it is a straightforward PPA, depreciation and capital employed would be lower at IOCL, but the power cost would flow directly through operating profit. The present disclosures therefore support a structure-dependent ROCE outcome, not a confirmed depreciation or ROCE forecast.