Buzzing Stock: Tata Power zoomed 71.4% in the last month. What’s driving the rally?

Tata Power shares have been on the upsurge given visible change in big focus from traditional areas to bet on green energy.

Shares of Tata Power Company has given stellar returns to investors in the past month with a gain of 71.4%. The share price stood at Rs 134.45 on September 20, 2021, and from then the stock has gone on to hit its 52-week high on the BSE of 269.70 on October 19, 2021, before closing at Rs 230.45 on October 20, 2021.

The Tata group stocks such as Tata Motors, Tata Power and Tata Chemical are proving to be major beneficiaries of the EV theme as it is getting the benefit of early mover and strategic asset allocation. Tata Power could well go on to be the leader in EV infrastructure in the country given recent events and this has been reflected in the stock price which has seen buying by investors betting on clean energy going forward.

A key trigger for recent movement in the stock price was the deal with Tata Motors to develop electric vehicle charging infrastructure. Tata Power partnered with Tata Motors, Morris Garages India Limited and JLR for developing EV charging infrastructure for their customers and dealers, including those for e-buses used by multiple state transport utilities.

Moreover, Tata Power's wholly-owned subsidiary Tata Power Solar Systems recently bagged Rs 538 crore contracts to build 100 MW of distributed ground-mounted solar projects for EESL. With this win, the Utility-Scale EPC order book of Tata Power Solar now stands at around 4 GW (DC) capacity with an approximate value of Rs 9,264 crore (without GST), thereby strengthening its position as India’s leading Solar EPC player.

There is also the buzz surrounding the company with regards to fund raising for the initial public offering (IPO) of its renewable energy unit. According to reports, Tata Power is in talks with a large pension and sovereign asset managers, including Canada Pension Plan Invest Board (CPPIB) and Government of Singapore Investment (GIC), to raise at least USD 500 million ahead of the proposed IPO for its renewable energy unit.

At 2.55 pm on Thursday, the stock of Tata Power Company Limited was trading at Rs 224.90, down by 2.41% or Rs 5.55 per share on BSE. The 52-week high of the scrip is recorded at Rs 269.70 and the 52-week low at Rs 51.65 on the BSE.