On Wednesday, shares of PTC India were locked in the upper circuit and climbed to the ₹100 mark at 9.50 A.M. The shares of the power trading company rose after reports suggested various interested buyers including names such as Tata Power, Adani Group, Greenko, and JSW Energy.
In the past month, the small-cap energy stock gained 24.78%. A report by The Economic Times stated that four promoters of PTC India plan to sell their stake in the company, amid controversies surrounding governance issues within its financial services subsidiary. The controversy led to the resignation of several company directors.
The four promoters – Power Finance Corporation, NHPL, NTPC & Power Grid Corporation Of India, each hold a 4.05% stake in the company. Combined, they hold approximately a 16% stake in the energy-trading company.
Five public sector undertakings, including the four promoters of PTC India, have planned to sell their stake. Damodar Valley Corp, which owns a 3.3 percent stake in PTC India, is also seeking to divest its holdings in the company. Combined, it would put the total stake on offer at almost 20 percent.
PTC India has a market capitalization of ₹ 2,979 crores. The company has a debt-to-equity ratio of 1.59, slightly higher than the ideal figure. The company’s price-to-earnings ratio (P/E ratio) is 6.68, almost half that of the sector P/E of 13.95, indicating that the stock might be undervalued.
A week ago, reports were published stating that the Adani Group was looking to buy a stake in the power trading company. The latest news suggests three more interested parties, Greenko, Tata Power & JSW Energy, have also been approached to assess their interest in acquiring a stake in the company.
Written by Karan N
Disclaimer
The content in this news article is not investment advice. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
