NHPC shares jump 6% as PM inaugurates solar project in Rajasthan

Shares of state-owned hydropower company NHPC rallied over 6% in early trade on Monday, extending gain for the fifth straight session, after Prime Minister Narendra Modi laid the foundation for the 300 megawatt (MW) solar power plant in Rajasthan. The PSU power stock has maintained an uptrend for the last five sessions since February 13, rosing over 21% during this period, after the company announced an interim dividend for the financial year 2023-24.

Extending gains, NHPC shares opened 1.8% higher at ₹94.60 against the previous closing price of ₹92.95 on the BSE. In the first two hours of trade so far, the counter gained as much as 6.4% to ₹98.90, with more than 1.6 crore shares changing hands over the counter. The market capitalisation rose to ₹98,150 crore.

At the current level, NHPC shares trade 15% lower than its 52-week high of ₹115.84 touched February 5, 2024, while it rebounded 160% against its 52-week low of ₹37.80 hit on February 27, 2023. The PSU stock has risen 94% in six months and 32% in a month. The counter has added 47% in the calendar year 2024.

PM Narendra Modi on February 16 laid the foundation stone for a 300 MW solar power plant in Bikaner, Rajasthan, which will help the government in achieving renewable energy capacity addition target and the goal of Net Zero by the year 2070. The project is being set up by NHPC under government of India’s central public sector undertakings (CPSU) Scheme, phase-II, tranche-III with a total investment of over ₹1,732 crore.

The project aims to produce around 750 million units of green power annually, considering a capacity utilisation factor (CUF) of 28.50%, which will offset carbon dioxide emissions of approximately 18,000 million metric tonnes over its lifetime.

As per the company, the electricity generated will be transmitted through Bikaner-II interstate transmission system substation. The power usage agreement for the project has been inked with Punjab State Power Corporation Limited (PSPCL), at a competitive tariff of ₹2.45 per unit for 25 years, considering viability gap funding (VGF) of ₹134.70 crore offered by the ministry of new and renewable energy.

The project, which is scheduled for commissioning by September 2024, has the potential to create employment opportunities for approximately 600 individuals indirectly during the project phase and 100 personnel during the operations and maintenance phase.

NHPC is India's leading hydropower company with a total installed capacity of 7,097.2 MW of renewable energy (including wind and solar) through its 25 power stations, including 1520 MW through subsidiaries. At present, NHPC (including subsidiaries / joint venture companies) is engaged in the construction of 15 projects with an aggregate installed capacity of 10,449 MW.

Last week, NHPC declared an interim dividend at the rate of 14%, or ₹1.40 per share, on the face value of ₹10 each for FY24. The board of the company has fixed February 22, 2024, as the record date to ascertain the eligibility of shareholders for payment of the interim dividend.

In the past 12 months, NHPC has declared a total equity dividend of ₹1.85, including ₹0.45 in August 2023 and ₹1.4 in February 2023, while it has paid 23 dividends since September 2010.

In the third quarter ended December 31, 2023, NHPC reported a 26.77% decline in its consolidated net profit at ₹491.90 crore as against ₹671.67 crore in the corresponding period last fiscal. Revenue from operation dropped 20.42% to ₹2,055.50 crore as against ₹2,582.76 crore in Q3 FY23.

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