GE Vernova Share Price Crashes 5% On Offer-For-Sale Launch: Good Buy For Retail Investors?
GE Vernova is 'definitely a buy for retail investors', given the kind of momentum which the power sector has seen in recent period, a market analyst said.
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 2.8% lower than the stock's current market price.
The base offer size 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%.
Apart from the company's fundamentals, 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%.
ALSO READ
Nomura Initiates Coverage On CG Power, GE Vernova T&D, Apar Industries With 'Buy'—Here's Why
Disclaimer: The views and opinions expressed by the investment advisers on NDTV Profit are of their own and not of NDTV Profit. NDTV Profit advises users to consult with their own financial or investment adviser before taking any investment decision.
