NTPC Green Energy share price gets hammered as lock-in period ends, down 35% from peak; what is driving the stock down?

Shares of NTPC Green Energy Ltd., a subsidiary of the state-run NTPC Ltd., witnessed a sharp decline of 8% on Monday, February 24, slipping below the psychological barrier of ₹100. This fall coincides with the expiry of the company’s three-month shareholder lock-in period, allowing a fresh batch of shares to enter the market.

Data from Nuvama Alternative & Quantitative Research revealed that nearly 18.33 crore shares, or 2% of NTPC Green Energy’s outstanding equity, have now become eligible for trading. However, the end of a lock-in period doesn’t automatically trigger a selloff—it simply allows shareholders the option to trade those shares.

NTPC retains strong hold, but market jitters persist

Despite the fresh availability of shares, parent company NTPC Ltd. maintains a robust 89% stake in its green energy arm after offloading a portion of its holdings during the IPO.

However, investor sentiment appears shaken by both the lock-in expiry and weak financial results for the December quarter.

As of 11.45 am on Monday,the shares of the newly-listed company were trading below 7%, with the share price hovering at ₹98.04 a piece.

As per the December quarter results, the company’s topline showed a modest 4.1% year-on-year growth, but profitability remained under pressure. Its Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) fell by 2.3%, and margins narrowed compared to the same period last year, indicating operational challenges.

Persistent downtrend since IPO debut

Since breaching its IPO price of ₹108 on February 11, NTPC Green Energy has struggled to regain its footing. The stock has declined in six of the last seven trading sessions, losing over 35% from its post-listing high of ₹155.

Investor outlook cautious amid volatility

Market experts suggest that the selloff reflects broader investor concerns around small-cap and mid-cap market corrections, along with the pressure of fresh supply due to the lock-in expiry. Despite the short-term challenges, the long-term outlook for NTPC Green Energy hinges on the company’s ability to strengthen its financial performance and capitalise on India’s growing green energy push.

Until then, volatility may remain the name of the game for investors eyeing this once-promising IPO debutant.