Could LIC-backed multibagger penny stock under Rs 25 be next Suzlon or Tata Power? Board announces rights issue for business expansion; target for 1 GW capacity
The stock gave multibagger returns of 120 per cent in just 1 year and a whopping 900 per cent in 3 years.
Today, the Indian indices were trading flat with BSE Sensex Index up 0.04 per cent at a level of 71,514 and NSE Nifty-50 Index up 0.08 per cent at a level of 21,474.
Despite near-term jitters, December saw historic market highs fuelled by economic strength, while the renewable energy sector's long-term potential shines bright amidst ambitious government targets and investor enthusiasm.
India's renewable energy sector shines brightly, propelled by government targets, falling tech costs, and surging energy needs. Investors flock to Sulon Energy, Tata Power and also Adani Green, as they outperform the broader market. While challenges like grid integration and policy dependence loom, ambitious 500 GW goals by 2030 and a favourable policy environment fuel optimism for the sector's long-term potential.
The renewable energy sector stock has a rising star ready to shine as brightly as Suzlon and Tata Power. The stock name is Orient Green Power Company Ltd.
Orient Green Power Company Limited is an independent producer of renewable power, it is engaged in developing, owning, and operating a diversified portfolio of wind energy power plants. The company currently have 421 MW capacity (incl. overseas capacity). The company's board approved a plan to expand its renewable energy capacity by 1 GW (1000 MW), based on an information memorandum prepared by a consultant-appointed firm. The managing director and CFO are authorized to execute the expansion plan.
While both Suzlon and Tata Power, giants in the energy sector, boast impressive installed capacities exceeding 14 GW, their market capitalizations paint a different picture. Suzlon, despite having a slightly higher capacity, commands a market cap half that of Tata Power. However, the story doesn't end there. Enter Orient Green Power, a rising star with ambitious capacity targets of 1 GW, already 42 per cent complete, and a market cap of just Rs 2,190 crore.
This stark contrast suggests immense potential for growth in Orient's valuation, mirroring the rapid progress it's making on the ground. This company is one to watch, holding the promise of potentially reshaping the landscape of the Indian energy market.
Additionally, the board of Orient Green Power Company has revised its plans for an equity share issuance through a rights issue. They've increased the potential fundraising amount from Rs 225 crore to a maximum of Rs 300 crore, subject to approvals. Details like issue size, price, and entitlement ratio will be determined by a dedicated committee, which will also set timeframes and manage other logistics. This decision suggests the company wants to raise more capital than initially planned, potentially indicating new growth opportunities or revised financial needs.
Orient Green Power is making strategic moves to bolster its renewable energy portfolio. The Board of Directors has approved a two-pronged approach: first, by directly investing up to Rs. 100 crores in its newly formed subsidiary, Delta Renewable Energy Private Limited. This injection of capital will likely go towards establishing windmills, solar power plants, or even hybrid projects under Delta's umbrella. Secondly, the company is proposing a rights issue of Equity Shares, with one of its key objectives being to infuse additional funds into Delta for its renewable energy development plans. This comprehensive strategy demonstrates Orient Green Power's commitment to expanding its presence in the clean energy sector while leveraging its subsidiary for focused execution.
As of September 2023, Life Insurance Corporation of India (LIC) commands a significant presence in Orient Green Power, holding the largest public institutional stake of 1.58 per cent (1,54,59,306 shares). The company have reported positive numbers in its Quarterly Results (Q2FY24) and annual results (FY23). In Q2FY24, the net sales increased by 54.4 per cent to Rs 122 crore and net profit skyrocketed by 733 per cent to Rs 75 crore compared to Q1FY24.
Today, shares of the company plunged 2.75 per cent to Rs 22.32 per share with an intraday high of Rs 22.95 and an intraday low of Rs 22.08. The stock gave multibagger returns of 120 per cent in just 1 year and a whopping 900 per cent in 3 years.
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Disclaimer: The article is for informational purposes only and not investment advice.
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