The stock of NHPC Ltd. jumped as much as 5.8% to touch the day’s high of Rs 43 per share during the first half of the trading session on Friday. This took the market capitalization of the ‘Mini Ratna’ status hydropower projects developer upwards of Rs 43,000 crore.
The increase in the share price of the company comes after The Investment Board Nepal (IBN) allowed NHPC to conduct a study of the 450 MW Seti River-6 Hydropower Project.
Sushil Bhatta, CEO of IBN gave the licence to Ashok Kumar Joshi, the Director General of NHPC. The licence will allow the hydropower company to perform a preliminary study with a time duration of 21 months.
Last year, the IBN signed two survey permits for 750 MW West Seti and 450 MW Seti River 6 hydropower projects. These two projects are valued at around Rs 300 billion. As part of the arrangement, NHPC pledged to invest Rs 180 billion (INR).
This is a prominent event for India as the Nepalese board exited the agreement with a Chinese company to onboard NHPC as the partner for this project.
This is the second positive news for the investors of the company this week. Recently, the company notified that it plans to commission the Subansiri Lower Hydroelectric Project soon. The 2,000 MW project had been halted from 2011 to 2019 because of safety concerns and the downstream impact of the structure.
The 2,000 MW Subansiri Lower Hydroelectric Project will be the largest hydroelectricity project in northeast India. The management assured that the fears of the civil society organisations are misplaced and standard safety measures have been implemented to avert any damage from earthquakes.
In the last year, the stock of NHPC has returned impressive 53% gains to its shareholders rising from Rs 28 per share to Rs 43. In addition to this, the stock offers a dividend yield of 4.2% at the present price level.
Written by Vikalp Mishra
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