Posted on February 24, 2025, by Niftynews
NTPC Green Energy shares, the renewable energy subsidiary of state-owned NTPC Ltd., has seen a significant decline in its share price. On February 24, 2025, shares of the company dropped by 8%, falling below the ₹100 mark for the first time since it went public. The stock had initially made a strong debut post-IPO, trading above ₹100, but has since experienced a downward trend, especially following February 11, 2025 when it slipped below its IPO price of ₹108. With today’s decline, NTPC Green Energy shares have dropped over 35% from their post-listing high of ₹155.
Why Did NTPC Green Energy Shares Fall?
A major contributing factor to the recent slump in NTPC Green Energy stock price is the expiration of the company’s shareholder lock-in period. As of today, February 24, 2025, approximately 18.33 crore shares, which represent around 2% of the total equity, have become eligible for trading. According to reports from Nuvama Alternative & Quantitative Research, this release of shares could increase the supply in the market, resulting in downward pressure on the stock price.
The end of the lock-in period generally leads to increased market activity as early investors, insiders, and employees are now able to sell their shares. While not all of the shares are expected to be sold immediately, it creates an environment of uncertainty, which often contributes to short-term price volatility.
Performance Overview of NTPC Green Energy
Despite the recent challenges in its stock price, NTPC Green Energy has made some progress in its business operations. For the December 2024 quarter, the company reported a 4.1% year-on-year growth in revenue, but its EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortisation) declined by 2.3%. Additionally, margins narrowed when compared to the previous year, signaling that the company faces operational challenges despite its growth in the renewable energy space.
The company’s golden portfolio is mainly focused on renewable energy projects, with solar, wind, and hydroelectric power playing a central role in its expansion plans. However, while it has been part of India’s push towards green energy, the company must overcome obstacles related to costs and scaling its operations.
Impact of Lock-In Expiration on NTPC Green Energy Stock
The expiry of the shareholder lock-in period could lead to more stock entering circulation, which may keep the pressure on the stock in the near term. While NTPC Green Energy‘s long-term prospects remain tied to India’s growing renewable energy market, the short-term effects of the increase in available shares could mean more fluctuations in the stock price.
Investors should closely monitor the market for any signs of stabilization once the initial wave of shares are traded. The expiration of the lock-in period doesn’t guarantee a sell-off, but it does open up the stock to greater market dynamics.
What’s Next for NTPC Green Energy?
The future of NTPC Green Energy hinges largely on its ability to scale operations, reduce costs, and maintain profitability in an increasingly competitive market. Although the company has demonstrated growth in its core operations, the narrowing margins and volatile stock performance reflect the complexities that lie ahead.
Looking at the broader picture, India’s renewable energy market continues to grow, and NTPC Green Energy is well-positioned to capitalize on this expansion, especially given NTPC Ltd. strong backing. However, for investors, the stock’s near-term volatility could persist due to the influx of shares post-lock-in and ongoing concerns over profitability.
For now, NTPC Green Energy stock is trading at ₹97.32, down by 7.8% on February 24, continuing its negative trend from previous sessions. It remains to be seen whether the stock can recover in the medium term, but the expiration of the lock-in period and the company’s current performance metrics indicate that the road to recovery may take some time.
Conclusion: Should Investors Buy or Hold NTPC Green Energy Shares?
In conclusion, the expiration of the lock-in period and the resulting increased supply of shares have led to a dip in NTPC Green Energy share price. While the stock’s long-term potential remains tied to the growth of the renewable energy sector, short-term volatility is likely to continue. Investors should exercise caution and consider their risk tolerance before making any decisions about buying or holding the stock.
