Shares of NTPC Ltd, India’s largest state-owned power company, traded higher on Wednesday following the company’s announcement of a plan to raise Rs 4,000 crore via unsecured, non-convertible debentures (NCDs). The issuance is scheduled for March 20, 2025, and will be conducted through a private placement. The NCDs will carry a coupon rate of 7.26% per annum and will mature on March 20, 2040, with a tenure of 15 years.
The move comes as part of NTPC’s broader strategy to optimize its financial structure. The raised funds will be allocated for capital expenditure, refinancing existing debt, and supporting general corporate activities. The issuance marks the first under a board resolution passed on June 29, 2024, which received shareholder approval on August 29, 2024.
Following the announcement, NTPC’s stock gained momentum, reflecting positive investor sentiment. In the previous trading session, NTPC shares climbed 1.75%, closing at Rs 337.40 on the Bombay Stock Exchange (BSE). The company’s market capitalization surged to Rs 3.27 lakh crore, with a total turnover of Rs 5.26 crore on the exchange.
In a regulatory filing, NTPC reiterated its commitment to financial prudence and efficient capital management. The company emphasized that the proceeds from the NCD issuance would be strategically deployed to enhance operational efficiency and support long-term growth initiatives.
Despite slightly missing market expectations, NTPC reported a robust financial performance for the third quarter of FY 2024-25. The company posted a net profit of Rs 4,711.4 crore, slightly below the estimated Rs 4,822.3 crore but registering a 3.1% year-on-year (YoY) growth compared to Rs 4,571.9 crore in Q3 FY24. Revenue for the quarter stood at Rs 41,352.3 crore, marking a 4.8% YoY increase from Rs 39,455 crore in the same period the previous year.
Moreover, NTPC’s earnings before interest, taxes, depreciation, and amortization (EBITDA) recorded a significant 20.3% YoY surge, reaching Rs 11,960.6 crore, up from Rs 9,941 crore in Q3 FY23. The rise in EBITDA highlights the company’s ability to maintain operational efficiency and profitability in a competitive market landscape.
As NTPC continues to expand its power generation capacity and invest in sustainable energy projects, the successful execution of its funding strategy through NCDs will play a critical role in achieving long-term financial stability and growth. Market analysts will closely monitor the impact of this move on the company’s financial health and investor confidence in the coming months.
