GE Vernova Share Price Crashes 5% On OFS Launch: Good Buy For Retail Investors?

Share price of GE Vernova T&D India Ltd., a power transmission and distribution solution provider, crashed by 5% to hit the lower circuit on Tuesday, after promoter Grid Equipments Pvt. launched an offer-for-sale to divest up to 8.38% stake in the company.

The slide in share price raised the question of whether retail investors—for whom the OFS will open on Wednesday—should aim to mop up the company's stock.

"This is definitely a 'buy' for retail investors, given the kind of momentum which the power sector has seen in recent period. Retail investors will try to buy the shares through the OFS and hold it on a long-term basis," said Kranthi Bathini, director of equity strategy at WealthMills Securities Pvt.

The 5% slide in GE Vernova's stock, after the OFS was launched for non-retail investors at the opening bell, took the scrip's price to Rs 1,823.5 apiece on the NSE.

The floor price fixed for the OFS, at Rs 1,550 per share, is still 15% lower than the stock's current market price.

"I feel there was no need to get OFS offer with deep discount in this market scenario. Looking at the market reaction it can be assumed that the selling pressure can continue to match anywhere near to OFS floor price," said Prashanth Tapse, senior vice president for research at Mehta Equities Ltd.

"Investors didn’t like the way promoters are exiting, as they reduced their stake from 75% in June 2024 to 59.39% in September 2024, and now additional sale of 8.38%. This will bring promoters holding down to 51%," he said.

The base size of OFS is of 1.4 crore shares, equivalent to 5.47% stake in the company. The promoter entity can also offer an additional 74.51 lakh shares, or 2.91% stake through the greenshoe option. This takes the overall OFS size to 2.14 crore shares or 8.38% stake.

A total of 10% of the offer has been reserved for retail investors, according to a regulatory filing. Retail investors would be considered as individuals who place bids of total value not exceeding Rs 2 lakh.

According to Bathini, retail investors who are looking at long-term investments will find GE Vernova as a "good buy". The stock has been rallying, he pointed out.

On a year-to-date basis, GE Vernova is up 262.7%, whereas the scrip's climb over the past 12 months has been of 330%.

The overall advantage which India's power sector is seeing makes it a strong investment opportunity for retail investors, Bathini said. "Power transmission companies are generally doing good...That's the reason behind the strong Q2 performance of these firms," the analyst said.

For the quarter ended Sept. 30, GE Vernova posted a 289% year-on-year jump in standalone net profit to Rs 144.6 crore, whereas the topline climbed by 58.7% YoY to Rs 1,107.7 crore.

Shares of GE Vernova remained locked in the lower circuit at Rs 1,823.5 apiece, as of 3:05 p.m. In comparison, the benchmark Nifty 50 was down 0.17%.

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