NTPC Green stock zooms 14% post steady debut; Should you book profit?

Shares of NTPC Green Energy, the renewable energy arm of NTPC Limited, saw a significant surge post its stock market debut. After a cautious start, the stock gained momentum, climbing as much as 13.65% to hit the upper circuit of ₹122.75 on the Bombay Stock Exchange (BSE) within the first 30 minutes of trading.

Similarly, on the National Stock Exchange (NSE), the stock rose 13.56%, reaching ₹122.65, showcasing robust investor interest.

NTPC Green Energy IPO Makes Waves on D-Street

Muted Start Followed by a Strong Rally

Earlier in the day, NTPC Green Energy shares began trading at ₹111.60 on the BSE and ₹111.50 on the NSE, reflecting a modest premium of ₹3.33 and ₹3.24 per cent, respectively, over its issue price of ₹108.

According to Prashanth Tapse, Senior VP (Research) at Mehta Equities, the listing aligned with expectations of a flat debut, given market sentiment and valuation factors.

"The subdued mood in the market justified the initial muted listing," Tapse explained. However, he also highlighted NTPC Green Energy's long-term growth potential due to its dominant position in the renewable energy sector, backed by NTPC's expertise and resources.

Growth Potential in Renewable Energy

NTPC Green Energy aims to capitalize on India's increasing demand for sustainable energy solutions. With aggressive targets in renewable energy, green hydrogen, and battery storage, the company is well-positioned to lead the country's transition to clean energy.

"Strategic diversification into green hydrogen, green chemicals, and battery storage enhances the company's long-term prospects," added Tapse. He advised long-term investors to hold onto the stock despite short-term market fluctuations.

For investors who missed out on the IPO, Tapse recommended accumulating the stock, especially if it trades near or below its issue price.

Analysts Offer Varied Opinions on Stock Strategy

Shivani Nyati, Head of Wealth at Swastika Investmart, noted that the listing performance exceeded modest expectations, aided by slightly improved market sentiment. "As a wholly-owned subsidiary of NTPC, the company enjoys a diversified portfolio and consistent top-line growth," Nyati said.

While optimistic about the long-term potential, Nyati flagged concerns over temporary profitability and margin fluctuations. She recommended a stop-loss of ₹110 for investors looking to hold the stock.

NTPC Green Energy IPO Overview

The NTPC Green Energy IPO, which closed with an oversubscription of 2.42 times, was fully comprised of a fresh issue of 92.59 crore shares. Priced within a band of ₹102-₹108 per share, the IPO saw varied participation across categories:

• Retail Individual Investors (RIIs): Oversubscribed by 3.44 times.

• Qualified Institutional Buyers (QIBs): Oversubscribed by 3.32 times.

• Non-Institutional Investors (NIIs): Subscribed 0.81 times.

• Employees: Subscribed 0.80 times.

• Shareholders: Subscribed 1.60 times.

A Key Player in India's Green Energy Transition

NTPC Green Energy plays a pivotal role in NTPC’s strategy to achieve 60 GW of renewable energy capacity by FY32. The company actively participates in competitive bidding, Ultra Mega Renewable Energy Power Parks (UMREPP), and tenders, enhancing its domestic and international presence in the green energy domain.

Conclusion:

NTPC Green Energy's debut on the stock market has certainly captured the attention of investors, with the stock surging 14% shortly after listing. While the initial performance was in line with expectations of a flat debut, the subsequent rise in share price reflects strong investor confidence in the company’s future prospects. Backed by NTPC's expertise and resources, NTPC Green Energy is well-positioned to capitalize on the growing demand for sustainable energy in India and globally.

For long-term investors, this could be an excellent opportunity to tap into the renewable energy sector, with a focus on green hydrogen, battery storage, and other sustainable solutions. However, given the current market volatility and short-term fluctuations, it's important for investors to evaluate their risk appetite and follow expert recommendations.

Whether to hold, buy more, or book profits depends on your investment strategy and time horizon. For those looking for exposure to India's green energy transition, NTPC Green Energy offers promising growth potential, but it is essential to stay informed and ready to adjust strategies as market conditions evolve.