250% Returns In 3 Years: Energy PSU Stock NTPC In Focus Amid Rs 20,000 Cr Investment In 2 Power Plants

NTPC shares saw a rise during early trading hours on September 20, following the company's announcement of a major investment in two thermal power projects. During a board meeting held on September 19, NTPC approved a total investment of Rs 20,832 crore to boost its power generation capabilities, which includes funding for two thermal power projects.

NTPC's board cleared the investment for the Sipat Super Thermal Power Project, Stage-III (1x800 MW), at an estimated cost of Rs 9,790.87 crore. Located in Chhattisgarh, the Sipat plant has been a contributor to NTPC's power generation capacity. The addition of Stage III is expected to enhance its energy output and ensure a reliable power supply to the grid.

In addition to this, the board also approved the investment for the Darlipali Super Thermal Power Project, Stage-II (1x800 MW), with an estimated cost of Rs 11,130.98 crore. Located in Odisha, the Darlipali project has been crucial for providing electricity to the eastern region of India. The second stage of the project will further augment NTPC's total installed capacity. Both projects align with NTPC's strategy of expanding its thermal energy capacity while transitioning toward greener energy sources.

In another development, NTPC's Kayamkulam plant, also known as the Rajiv Gandhi Combined Cycle Power Project, is set to pioneer a pilot project for electricity generation using methanol. Methanol, a clean-burning fuel, offers a promising alternative to traditional fossil fuels due to its lower emissions.

The state-run company has partnered with Bharat Heavy Electricals Ltd (BHEL) to demonstrate methanol firing in Kayamkulam's existing gas turbine system. Phase 1 of the project, which will last for a year, will assess the feasibility of using methanol as a sustainable energy source. If successful, this innovation could reduce power generation costs, and support a circular carbon economy.

As NTPC continues to strengthen its presence in the energy sector, its green energy arm, NTPC Green Energy Ltd, has also been making headlines. Recently, the company filed its Draft Red Herring Prospectus (DRHP) for an initial public offering (IPO) aimed at raising Rs 10,000 crore. The IPO will be a fully fresh issue with no offer-for-sale (OFS) component.

Retail investors stand to benefit from this IPO, especially those holding NTPC shares. These shareholders will be able to bid under the shareholder category with a maximum limit of Rs 2 lakh, increasing their bidding limit to Rs 4 lakh.

Despite these positive developments, NTPC shares saw some fluctuation on September 20, trading at Rs 418.35 per share, down more than 1% as of 10 a.m. on the National Stock Exchange (NSE). However, the stock has been a strong performer over the past year, delivering returns of nearly 80%, well above market averages. In 2023 alone, the stock has surged by 36%, outpacing the Nifty's returns of 16%.