Why Are NTPC Shares Falling Today? As the PSU Powerhouse Plans To Raise Rs 18000 Cr Via Bond, Time To Buy?

NTPC Share Price Today: Shares of National Thermal Power Corporation (NTPC) plunged by nearly 3% on Tuesday amid a significant spurt in trading volume, possibly due to a block deal. The PSU powerhouse on Monday had sought shareholders' approval to raise up to Rs 18,000 crore of bonds through private placements of bonds or non-convertible debentures in the domestic market.

NTPC Shares Plunge Amid Significant Surge In Volatility

NTPC shares spurt in volume by more than 51.98 times on BSE. Nearly 8.49 crore of NTPC shares exchanged hands at the time of the opening of the Indian stock market today. According to BSE, almost 13,15,956 NTPC shares were bought and almost 20,90,149 NTPC shares were sold as on Tuesday at 9:44 am.

The PSU stock touched an intraday low of Rs 321.35 per share on BSE. The company scrip was trading 3.18% lower at Rs 323 apiece on BSE at 9:50 am with a market capitalisation of Rs 3,13,299.28 crore.

NTPC To Raise Rs 18,000 Crore Via Bond Issue

The leading power company, NTPC, plans to raise ₹18,000 crore by issuing non-convertible debentures (NCDs) or bonds through private placement in the domestic market. The company has issued a postal ballot notice to seek shareholder approval for this fundraising initiative via remote e-voting. This move aims to support NTPC's capital expenditure and other financial needs.

The funds will be raised in multiple tranches or series, not exceeding 12, within a year from the date of passing the special resolution. The company's board approved the draft notice for this postal ballot on June 21. Shareholders' approval is crucial for NTPC's plan to issue secured or unsecured, redeemable, taxable or tax-free, cumulative or non-cumulative NCDs.

The company is currently expanding its capacity, necessitating significant capital expenditure funded primarily through debt. NTPC's borrowing strategy includes NCDs, rupee term loans from banks and financial institutions, foreign currency borrowings, and bonds. These financial instruments are crucial for meeting both capital expenditure and working capital requirements.

NTPC raises NCDs either through public issues or private placements. In addition to funding capital projects, these borrowings also address general corporate purposes and working capital needs. The company's strategic approach ensures that it can meet its financial obligations while continuing its expansion efforts.

This fundraising initiative reflects NTPC's commitment to maintaining financial stability while pursuing growth opportunities. By leveraging various financial instruments, NTPC aims to efficiently manage its resources and support its long-term objectives.

NTPC Share Price Recommendation With Target Price

Antique Stock Brokerage has given a 'Buy' rating for NTPC stock with a target price of Rs 409 per share. It has indicated an upside of 23% for the stock in long term. In contrary to Antique, Kotak Institutional Securities in its latest report has issued a 'Sell' rating for NTPC shares and has given the stock a fair value of Rs 320 apiece indicating a 3% downside in its valuation in long-term.

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