Shares of power generation and power finance companies were in focus on Friday and they rallied up to 12 percent amid high volumes on rising demand.
NTPC (up 4.06 percent), Tata Power Company (up 4.85 percent), REC (up 11.10 percent), and Power Finance Corporation (up 12.89 percent) were some of the top gainers.
Experts believe that the Power Sector in India is on course for a long period of high growth and transformation which is visible in the increasing deployment of clean renewables. India’s power consumption grew by over 16 per cent to 151.66 billion units in August this year compared to that of the same month last year.
Last week the Ministry of Power directed all states, their power distribution companies (discoms) and central and state generating companies (gencos) to meet the rising electricity demand that crossed a record 241 gigawatts (GW) last week.
Sub-optimal monsoon has not only affected crops but also hydro and wind power generation. Gas-based generation is also on the lower side, therefore, the entire onus of electricity supply during non-solar hours falls on coal, they believe.
India’s power demand is expected to grow by more than 70 per cent over the next decade with a strong focus on non-hydropower renewable sources. The coal-powered generation will still account for a majority of production by 2032, illustrating the country’s heavy reliance on the coal sector, according to BMI, a division of Fitch Group.
The global trend towards the adoption of electric vehicles (EVs) and their fast adoption in India is likely to see an increase in demand for electricity.
REC Ltd
REC is a Central Public Sector Undertaking under the Ministry of Power involved in financing projects in the complete power sector value chain from generation to distribution.
The company’s shares gained 156.19 percent over the past year, to deliver multibagger returns. Its shares settled at ₹ 269.90 apiece, with a market capitalization of ₹ 64,646 crores. Its share price reached a record high of ₹ 272.80 apiece on Friday.
Power Finance Corporation Ltd
Power Finance Corporation is a Non-Deposit taking NBFC registered with the RBI as an Infrastructure Finance Company. It is engaged in extending financial assistance to the Indian power sector.
The company’s shares gained 163.80 percent over the past year, to deliver multibagger returns. Its shares settled at ₹ 306.40 apiece, with a market capitalization of ₹ 71,823 crores. Its share price reached a record high of ₹ 306.90 apiece on Friday.
Written by Simran Bafna
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