NTPC Shares In Focus After Raising Rs 6405 Crore For Expansion; Should You Buy, Sell or Hold?

NTPC Shares in Focus: National Thermal Power Corporation (NTPC) shares opened in green remain on Thursday, June 12, following the PSU's announcement of raising $750 million (Rs 6405 crore approximately) via External Commercial Borrowing (ECB) loan for business expansion.

The Maharatna PSU stock closed marginally lower at Rs 338.05 per share on BSE on Wednesday. NTPC shares were trading 0.62% higher at Rs 340.15 apiece on BSE at 9:30 am. The stock value has surged around 2.16% year to date (YTD).

NTPC Raises $ 750 million Via ECB Loan For Expansion

The state-owned power utility firm announced on Wednesday that it has raised $750 million via an ECB syndicated term loan to fund the expansion of its renewable energy projects.

The $750 million unsecured loan raised by NTPC due to a Facility Agreement will include a door-to-door tenor of 10 years and an average maturity of seven years. The loan include $500 million of base issue and a greenshoe option of $250 million, reported Economic Times.

"NTPC is spearheading a transformative expansion of its energy portfolio, with a strategic vision to achieve 60 GW of renewable capacity by 2032 and elevate its total installed capacity from 80 GW to 130 GW+. This ambitious trajectory underscores NTPC's leadership in sustainable energy and its dedication to a balanced, future-ready power ecosystem. We gratefully acknowledge Bank of Baroda and HDFC Bank's steadfast collaboration as valued financial partners in this journey," ET quoted Jaikumar Srinivasan, Director (Finance), NTPC Limited.

Key Banks Involved In NTPC Agreement

Bank of Baroda played a crucial role as the Mandated Lead Arranger and Underwriter for the $500 million portion of the loan. Meanwhile, HDFC Bank took on the responsibility as the Mandated Lead Arranger and Bookrunner for the greenshoe portion amounting to $250 million. Both banks conducted these transactions through their IFSC Banking Units located in GIFT City, Gandhinagar.

The funds raised will be directed towards NTPC's capital expenditure initiatives. These include projects for adding new capacity, implementing flue gas desulphurisation systems, developing renewable energy facilities like hydro-based projects, and refinancing existing ECBs according to the Reserve Bank of India's guidelines.

NTPC Stock Price Recommendation

Antique brokerage in its June 12 stock market report, had initiated a 'Buy' rating for NTPC stock with a target price of Rs 409 per share. The brokerage has indicated an 21% upside in NTPC stock value in near term.

About NTPC

NTPC was established in 1975, ever since then, the company has taken on key power energy projects, many related to green energy transmission. The state-run PSU became the first major utility to commit toa UN Energy Compact in 2021 to identify ambition targets, including installing of 60 GW of renewable energy capacity by 2032.

With installed capacity primarily from thermal power plants, the company has focused on the expansion of its share of renewable energy in solar, wind and hydro installations.

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