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NTPC Green Energy Limited (NSE: NTPCGREEN), which is the renewable energy arm of India’s NTPC Limited, made a promising trading debut, as a result of the growing demand for clean energy investments. However, after hitting its peak after its listing, it is experiencing some volatility.
Here are the details of its performance, technical outlook as well as its investment potential.
As of November 29th, 2024, NTPC Green Energy’s stock is trading at ₹125.20, down 2.00% for the day as of writing before close. The stock has traded between the day's range of ₹123.22 to ₹132.13, close to its all time high of ₹132.30 reached after its listing.
The company floated its shares for the first time on November 27th and the stock flew as high as 14 percent over its offer price of Rs 108 during its listing and the company is valued at Rs 1.02 trillion ($12.08 billion). Investors have since settled down, profit-booking was partly to blame for sliding from these peaks.
After the impressive launch and start, NTPC Green Energy has shown a bearish trend after touching ₹132 all-time high.
Immediate support level lies at around ₹122, just below the current market price. If this level holds, the price is likely to bounce back and will potentially retest the ₹132 resistance which also happens to be the all time high.
In case of a break and close below the support level of ₹122, there could be a further decline towards the next support zone at ₹116.
If looking for an opportunity to invest, monitor the ₹122 level in the coming sessions because it will be critical for gauging near-term direction.
Renewable Energy Leadership: NTPC Green Energy Limited being one of the main drivers of the clean energy scenario in India, the company enjoys administrative support and various execute energy solutions’ demand in the country.
Innovation and Expansion: The company is advancing into hydrogen and battery storage: Green hydrogen subsidiary in Andhra Pradesh and grid storage batteries.
Low-Cost Financing: Leveraging NTPC’s reputation, the subsidiary secures debt financing at competitive rates, ensuring efficient capital allocation.
High Valuation: Valuation wise, with the current P/E ratio of 343.69 and at 16 x EV/EBITDA (FY2028 estimates), the stock is considered pricey by analysts like Kotak Securities.
Market Volatility: The overall IPO market has been headed south, with foreign investors pulling out their money which might affect the sentiment.
Dependence on Policy Support: NTPC Green has big potential in India depending on the government intentions and funding in the renewable energy sector.
In the longer run, NTPC Green Energy looks well-positioned in the renewable energy segment, but the current rating might well be stretched.
It is advisable to keep holding the stock and look out for other levels for re-entering the market around the support level ₹122.
Short-term orientation might regard this as an opportunity to make money off the emergent renewable energy segment in India.
New investors could wait for a correction, or better investment case to emerge after IPO has been completed.
NTPC Green Energy’s IPO has brought to focus its fundamentals and growth plan in the field of renewable energy in India. Hence, unlike the financial ratios and analysis, the short-term valuations, and technical indicators make it rather tentative to be optimistic about long-term growth prospects. Pay special attention to support levels and consider the broader market environment before making decisions.
As India continues to increase its investment in the clean energy business, NTPC Green Energy Ltd. maintains its position as a strategic player with steady development opportunities in the market.
