From NTPC To SVJN: Power PSU Shares Jump To Record High After Higher Allocation In Budget

Stocks of government-owned power companies such as SJVN Ltd., NHPC Ltd., Power Grid Corp. of India, and NTPC Ltd. extended gains to touch a fresh record high on Monday since the presentation of the Interim Budget by Finance Minister Nirmala Sitharaman on Feb. 1.

Sitharaman announced assistance for installing rooftop solar systems in 1 crore houses under the Pradhanmantri Suryodaya Yojana, among other allocations.

The funds allocated to NHPC were raised to Rs 11,761 crore from Rs 9,006 crore in the previous year, and Powergrid's allocation increased to Rs 12,250 crore from Rs 8,800 crore.

SJVN's allocation rose to Rs 1,841 crore from Rs 1,150 crore.

"Pradhan Mantri Suryodaya Yojana, at scale (as and when that happens), is set to benefit manufacturers of solar panels, capital goods, structural steel pipes, and consumer durables and electrical companies, as well as power financing players. We estimate the total opportunity size for solar panels, based on the current announcement, to be 10 GW at a total investment of Rs 554 billion," said Elara Capital.

Shares of SVJN jumped the most, surging nearly 16%. NHPC stock followed, rising over 11%. NTPC and Powergrid shares advanced over 1%.

“The plan for supporting solar rooftops in 1 crore households augurs well for developers and module manufacturers as it will bump up rooftop demand," said Ankit Hakhu, director, CRISIL Ratings.

It will also be attractive for households, given the potential to save on electricity costs of Rs 15,000–18,000 per annum per household. That said, the quantum and mechanism of disbursements and timelines around the support will determine the pace of progress of the scheme and will bear watching, according to him.

At least 2.59 crore shares, or 0.3% of NHPC's equity, changed hands in large trades on Monday, according to Bloomberg data. Buyers and sellers were not known immediately.