NTPC shares up 4% as investors pursue stake in Green Energy unit

Based in India, the company came into the spotlight after entities like Canada Pension Plan Investment, Brookfield, and ArcelorMittal expressed interest in a minority stake oThe shares of NTPC – National Thermal Power Corporation – have reportedly reached record high levels in the last 52 weeks reaching $2.08 on the BSE last week.f NTPC Green Energy Limited (NGEL).

NTPC outpaced the market during the last six months, rising 25% as compared to the benchmark index's 6% growth. The stock has increased by 41% in one year, as opposed to the S&P BSE Sensex's 1.4% growth.

In June this year, NGEL issued an invitation for expressions of interest (EoI) for the sale of 5% to 10% of its shares. The enormous thermal power plant intends to sell minority shares to generate funds up to USD 250 million.

It is worth noting that the equity sale of NGEL is a component of NTPC's 3-year-long asset monetization plan, which is set at USD 188 billion.

Beyond NGEL listing, NTPC is planning to reduce its interest in two firms, Northeastern Electric Power Corporation (NEEPCO) and NTPC Vidyut Vyapar Nigam ltd (NVVN).

It has been reported that, NTPC purchased 100% share in NEEPCO in March 2020 to help the Center reach its divestment goal. NEEPCO had previously been controlled by the Union Government of India.

The capital raise will allow NTPC to get expansion capital and carry out its capacity development plans, building upon the company's goal of achieving 60 gigawatts (GW) of renewable power by 2032.

According to brokerage company ICICI Securities, NTPC's foray into the green energy value chain and monetization via stake sales to strategic investors will add to the ESG matrix.

Moreover, the corporation aims to have a 25% market share in ancillary storage and associated services by 2032.

Source Credit: https://www.business-standard.com/article/markets/ntpc-gains-4-on-big-names-bid-for-minority-stake-sale-in-green-energy-arm-122090200232_1.html