BUY Maharatna PSU Energy Stock NTPC To Fetch Double-Digit Gains; Big Rs 10,000 Cr IPO Update Of NTPC Green

Powerpack Maharatna PSU, NTPC Ltd has been on a bullish trend in 2024 so far. YTD, the stock is up by nearly 19% on BSE. Trading below Rs 370 levels, this energy stock is among the top picks of brokerages. Going ahead, NTPC plans DRHP activities for its subsidiary NTPC Green's Rs 10,000 crore IPO post June, while aiming for public listing in October to November. Also, the company pay final dividend of 32.50% for FY24.

Last week, NTPC overall ended on a positive note with weekly gain of 1%. The stock is currently at Rs 368.40 apiece with market cap of Rs3,57,225.18 crore. The stock is moving closer to its 52-week high of Rs 395.00 apiece.

As per BSE data, NTPC shares price to equity is at 19.76x, and return on equity is at 12.06%. Both are healthy. YTD, the stock is up by 19%, while in a year, the gains were nearly 96%. NTPC's all-time gains is about 485%.

Meanwhile, NTPC is set to pay its final dividend at the rate of 32.50% or Rs 3.25 per share) for the financial year 2023-24, subject to the approval of the Shareholders in the ensuing Annual General Meeting. The record date is yet to be announced.

This final dividend is in addition to the first interim dividend at the rate of Rs. 2.25 per share & second interim dividend at the rate of Rs. 2.25 per share of face value of Rs. 10/- each for the financial year 2023-24 paid in November'23 & February'24, respectively. Since February 2005, NTPC has delivered up to 41 dividends, as per Trendlyne data.

Apart from dividend record date, NTPC has already informed its shareholders that they will continue with IPO of their subsidiary engaged in the business green energy. It will be of the behemoth IPOs. NTPC has stated that the process of DRHP will begin after June month. The IPO listing of NTPC Green will keep NTPC in focus.

In the analysts and investors meet on May 24, NTPC management said, "See, as far as the monetization goes, we are going ahead with the IPO plans. This would be tentatively around October or November. That is the broad plan. So, post June, it will be, DRHP activities and other due diligence process would take shape."

The management also said NTPC would continue to the holding company, NGEL would remain a subsidiary of NTPC even post IPO. The PSU giant is looking to launch Rs 10,000 crore worth IPO of NTPC Green.

NGEL is an umbrella company for the green business initiatives of NTPC and undertakes projects through organic and inorganic routes and aims to be the flag-bearer of NTPC's green energy journey to achieve the ambitious target of 60 GW by FY32.

Brokerages like HDFC Securities, JM Financial, ICICI Direct and others have recommended BUY on NTPC share price.

JM Financial has set a target price of Rs 414 apiece on NTPC with buy recommendation. While ICICI Direct has suggested a target of Rs 455.

In its note, ICICI Direct said, "With capacity addition visibility of 20GW of renewables, NTPC has set out
an aggressive renewable capacity addition plan to the tune of 16000 MW
over FY24-FY26, which will scale up the green portfolio of the company
and lead to rerating of the stock."

ICICI Direct's note added, "The company will also witness strong growth in regulated equity in the conventional thermal portfolio We estimate PAT to grow at 26% CAGR respectively over FY24-26E. We maintain our BUY rating on NTPC. We value the stock at ₹ 455 per share (based on 2.5x FY25 Book Value)."

Furthermore, as per Trading View, the 19 analysts offering 1-year price forecasts for NTPC Ltd have a max estimate of Rs 495 with minimum estimate of Rs 258.

NTPC is India's largest power utility with a total installed capacity of 76,048 MW (including JVs). Established in 1975, NTPC is steering ahead to be India's largest integrated power company and targets to become a 130 GW firm by 2032.