NTPC’s renewable energy arm NTPC Green shares sink more than 8% on the 90 days lock-in expiry day. It is the first time that NGEL’s shares reached its 52-week low and fell below the INR 100 per share mark.
NGEL’s anchor allocation round took place on 18 November 2024. A total of 107 Anchor Investors were allotted 36.67 crore shares at the upper price band of INR 108 per share, reflecting INR 3,960 crore. This represents 39.67% of the total issue size. Currently, the company’s shares are trading at around INR 98 per share.
Lock-in Expiry: A Short-term Shock or a Deeper Concern?
So, what’s behind the sudden drop? The key culprit is the expiration of the lock-in period, which has freed up 18.33 crore shares (about 2% of the company’s outstanding equity) for trading. These restrictions are typically imposed post-IPO. This mechanism is designed to prevent early investors, company insiders, and anchor investors from offloading their stakes too soon—a measure that helps stabilize stock prices in the early months.
As the cap lifted, selling pressure kicked in, sending the stock into a downward spiral. While this doesn’t necessarily mean all released shares will be dumped at once, it does introduce uncertainty and short-term volatility, as some investors decide to cash out.
From IPO Buzz to Market Blues: A Rocky Road Since Listing
NTPC Green Energy made its stock market debut on 27 November 2024 and delivered a modest 3% return over its IPO price of INR 108 per share. However, the stock picked momentum and reached its all-time high of INR 155 per share, reflecting a 43% premium over the allotment price.
The stock has been battling persistent selling pressure, and by 11 February 2025, it had already slipped below its IPO price. Since then, it has been on a losing streak, falling in six of the last seven trading sessions.
On 24 February, the pressure intensified. The stock opened at INR 97.70 before sinking to a new 52-week low of INR 96.20, cementing its place in investors’ red zone.
Company Fundamentals: Strong, but Will That Be Enough?
Despite the turbulence in the stock market, NTPC Green Energy remains a powerhouse in the renewable energy sector. It is India’s largest public sector player in renewables (excluding hydro), with a robust portfolio of solar and wind power projects spread across the country.
NTPC Green Q3 FY25 Performance: A Mixed Bag
- Revenue: Up 4.1% YoY, reaching INR 460.9 crore (vs. INR 442.6 crore in Q3 FY24).
- Net Profit: Soared 52.3% YoY to INR 89.4 crore (from INR 58.7 crore in Q3 FY24).
- EBITDA: Dropped 2.3% YoY, coming in at INR 384.6 crore (vs. INR 393.6 crore in Q3 FY24).
- EBITDA Margins: Shrank to 83.5%, down from 88.9% in Q3 FY24.
On paper, revenue and profit growth look solid, but the declining EBITDA and margins may have made some investors nervous. With an ambitious goal of scaling up its renewable energy capacity to 60 GW by 2032, the company has big plans, but it will need steady investor confidence to stay on course.
What’s Next? Investor Sentiment & Market Outlook
Stock price drops following the NTPC Green IPO anchor lock-in expiry aren’t unusual, especially in cases where a large volume of shares suddenly becomes tradable. The question is—will this be a passing phase, or is it a sign of deeper trouble?
Some market watchers believe this is more of a technical dip rather than a reflection of weak fundamentals. Once the initial selling wave subsides, the stock could stabilize, particularly given NTPC Green Energy’s strong earnings trajectory and long-term growth prospects.
That said, institutional participation and broader market sentiment will be key indicators to watch. If large investors see value in the company’s future and start accumulating shares at these lower levels, a rebound could be on the horizon.
Bottom Line: A Temporary Slip or a Wake-Up Call?
NTPC Green Energy’s 8% drop post-lock-in expiry is a classic case of short-term volatility colliding with long-term potential. While the dip has dragged the stock below INR 100 for the first time, its fundamental strength, growth trajectory, and alignment with India’s clean energy ambitions suggest a potential turnaround.
For now, all eyes will be on how the stock absorbs the selling pressure, attracts fresh investors, and navigates upcoming market shifts. Is this just a speed bump, or the start of a bigger trend? Only time will tell.
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