Investor attention is focused on the stock of government-owned NTPC Ltd on Tuesday.
New Delhi: India's largest public sector power generation company, NTPC Ltd, is once again in the spotlight. Investors are keenly observing this PSU power stock because the company has announced plans to raise approximately ₹18,000 crore (approximately $2.2 billion USD). NTPC has proposed this decision for consideration at its upcoming board meeting, a significant indication within the market and energy sector. This move is being undertaken in light of the company's long-term plans, expansion strategies, and capital expenditure.
The announcement has elicited a positive response in the stock market. On Tuesday, the company's shares saw a slight uptick, reaching ₹335. Although this increase was modest, the fund-raising announcement certainly captured investor attention.
Company Objective: Expansion and Stability
The primary objective of NTPC's plan is to meet capital expenditure (CapEx), repay existing debts, and address other general business needs. The company intends to raise this amount by issuing non-convertible debentures (NCDs). These debentures can be secured or unsecured, taxable or tax-free, and will be repayable.
NTPC recently announced, on June 17th, the raising of ₹4,000 crore (approximately $488 million USD) through private placement, with a tenure of 10 years and 1 day. This amount will mature on June 18th, 2035, carrying a 6.89 percent annual interest rate. This step represents another initiative to strengthen the company's financial position.
Increased Power Generation: Successful Trial Run
Regarding technological advancements, NTPC recently completed a successful trial run of the third unit (660 MW) of the Northern Karanpura Super Thermal Power Project located in Chatra district, Jharkhand. The commissioning of this unit has increased the group's total installed power generation capacity to 81,368 MW, with NTPC's individual capacity reaching 60,266 MW.
This achievement not only showcases NTPC's technological capabilities but also demonstrates its commitment to meeting future energy demands. The Northern Karanpura project has been closely monitored by the central and state governments for a considerable time. The three units together have a power generation capacity of 1980 MW, fulfilling the energy needs of Jharkhand and several other states.
Foreign Investor Interest: Singapore Government's Stake
NTPC's growing strength is also evident in the interest shown by international investors. According to Trendline, the Singapore government held a 2.37 percent stake in NTPC as of March 2025. This participation reflects global confidence in NTPC's stability and performance, and underscores the serious interest of foreign investors in India's power sector.
The participation of foreign institutional investors gives Indian companies a distinct identity in the global market and signals confidence in the country's economy.
NTPC's Forward-Looking Steps
NTPC is proactive in its strategy. The company is not solely reliant on traditional coal-based power generation but is also actively pursuing renewable sources like solar and wind energy. The company aims to achieve 50 percent of its total generation capacity from renewable sources by 2032.
This shift reflects not only environmental responsibility but also addresses the expectations of global investors and environmental organizations. This is why NTPC has also received international recognition for its green bonds and sustainable financing.
Implications for Investors
Investors are displaying positive sentiment regarding NTPC's decision. The company's fund-raising plan and the successful trial run clearly indicate its seriousness about future expansion. Furthermore, the company's financial plans point towards stability.
Based on the current share price, NTPC is considered a medium-risk, stable-return company, particularly attractive to investors with a long-term perspective. In terms of dividends, NTPC has a b track record, making it an attractive option for retail investors as well.
Stability and Profitability in a Government PSU
This initiative by NTPC once again demonstrates that government-owned companies are capable of making strategic and aggressive financial decisions, just like private companies. The efforts by the government in recent years to increase transparency and efficiency in PSU companies are now bearing fruit. Institutions like NTPC are now making decisions aligned with global standards.
