NTPC shares rose 3 per cent in morning trade on November 25 to hit Rs 377, continuing its gains for the second consecutive trading session after Bernstein maintained an ‘outperform’ rating on the company and raised the target price.
With a target price of Rs 440, the international brokerage forecasts a 20.5 per cent upside from current market levels, citing strong power demand, lack of evening hours and the company’s debt-cost advantage as key drivers.
While analysts do not see any significant upside beyond these factors, they are also not expecting downside risk. NTPC shares are currently valued at 16 times FY25 earnings and 10 times EV/EBITDA, which is aligned with global peers.
Boosting NTPC’s prospects, its renewable energy arm, NTPC Green Energy, recently completed a Rs 10,000 crore IPO. The issue, which was subscribed 2.42 times, saw strong demand from retail investors and qualified institutional buyers, with the issue garnering 3.44 times and 3.32 times subscription, respectively. The Rs 7,500 crore proceeds from the IPO will be used to repay outstanding loans of NTPC Renewable Energy Ltd and for corporate purposes.
Market experts pointed out that listing of NTPC Green Energy as a separate entity could lead to a holding company exemption, potentially impacting existing NTPC shareholders. NTPC Green Energy, a ‘Maharatna’ PSU, boasts of a renewable portfolio of solar and wind power assets, adding to NTPC’s focus on green energy expansion.
At around 9:30 am, the company’s shares were trading at Rs 373, up 2.5 per cent from its previous close on the NSE. Given the recent correction in the market, NTPC shares have declined 12 per cent in the last month.
