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Why Tata Power Stock is Falling? | Reasons behind 12% Stock Fall

Why Tata Power Stock is Falling? | Reasons behind 12% Stock Fall | Yadnya Investment Acdemy

Published on 12 April 2021

On Monday, 12th April 2021, Nifty was down by 3.24%, while Sensex was plunged by 3.44%. At the same time, the Tata Power Stock rate collapsed by more than a 12% fall on a single day of trading. So What were the possible reasons behind this fall in stock? Let's discuss this in detail.

Introduction: Tata Power Value Research

The NSE and BSE witnessed a correction of more than 3% on single-day trading on Monday 12th April 2021. The primary reason behind this correction in the market is due to increasing Covid-19 cases and the possibility of lockdowns. Apart from this correction in the market, the Tata Power Stock prediction witnessed a vast correction and downfall in its stock price. The stock plunged by more than 12% on Monday.

Reason:

Tata Group has terminated the deal with Petroliam Nasional Bhd (Petronas) worth $2 billion. Petronas was a Malaysian state-owned Oil and Gas Company. This deal was closely associated with renewable energy, and hence this termination of the agreement has raised concern in the market about whether it is a positive sign or not?

What should shareholders do?

  • One thing long-term investors of Tata Powers should look at is the overall thought process of the company and just not about the termination of this deal.

  • Tata Power is exploring listing opportunities for their renewable business.

  • This renewable business might include EPC, Microgrid, EV Charging Stations, and rooftop solar panels. These plans look intact.

  • Also, Tata Power was having an existing burden of around Rs. 36,000 Cr. They wanted to settle out through this deal and bring it down to around Rs. 25,000 Cr.

  • Tata Power growth & visibility and shareholders should not panic at this time.

Operational Portfolio:

  • Tata Power currently has an Operational Portfolio of 2.6 Gigawatt, including the Welspun Portfolio and the 1.3 Gigawatt pipeline.

  • The company’s target is 15 gigawatt which is six times the current portfolio which is quite impressive.

  • This factor shows the tata power growth rate and potential of the company.

Current Footprint: Tata Power Valuation Report

  • Tata Power value has a presence in Maharashtra, Gujarat, Andhra Pradesh, and Tamil Nadu.

  • There is an availability of massive opportunity for the company if it eyes for Pan India’s presence.

  • Tata Power has unilaterally cancelled the projects of 60 megawatts and 100 megawatts in Gujarat.

Conclusion: Tata Power Stock Analysis

Tata Power stock price responded aggressively to the fall in the market. On the one hand, where the Nifty and Sensex were down by 3%-4%, the particular counter fell by more than 12%. The reasons behind this massive fall in the stock price were calling off the deal with Petronas, which was not liked by the market. Besides termination with this deal, the company stills possess great potential and have a growing opportunity in the sector. Looking at the prospect of the company, shareholders should not panic over the news at this point.

 

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