Shares of NTPC Green Energy Ltd., a subsidiary of the state-run NTPC Ltd., suffered significant losses on February 24, 2025, as the company’s three-month shareholder lock-in period came to an end. The shares plummeted by 9%, hitting the 52-week low of ₹96.20 during intraday trading.
The end of the lock-in period meant nearly 183 million shares were eligible for trading, which translates to about 2% of the company's total outstanding shares. This release of shares significantly increased the trading volume and put downward pressure on the stock price for NTPC Green Energy, which previously debuted at ₹108 during its initial public offering (IPO) back in November 2024.
Typically, the lock-in period is instituted following IPOs to prevent major shareholders, including company insiders and early investors, from flooding the market with shares immediately after the stock begins trading. This restriction is intended to provide market stability as the company establishes its foothold. According to Nuvama Alternative & Quantitative Research, the expiry allows for trading but does not guarantee these shares will be sold. "The end of the lock-in period doesn’t automatically trigger a selloff—it simply allows shareholders the option to trade those shares," the report explained.
Following the lock-in expiry, NTPC Green Energy shares tumbled below the ₹100 threshold, finishing at ₹97.83 on the NSE as trading volumes surged dramatically—almost three times the stock's usual activity. On Monday morning, for example, the stock had fallen over 7% shortly after market opening, continuing its downward trend from previous weeks. The stock has now dropped about 38% from its all-time high of ₹155.30, which it reached on December 4, 2024.
While the end of the lock-in period marked the beginning of increased trading for NTPC Green Energy, it coincided with concerns over the company's recent financial performance. During the December quarter, NTPC Green Energy reported modest revenue growth of 4.1% year-on-year, with total income rising to ₹581.46 crore compared to ₹463.46 crore the previous year. Despite this positive growth, the company’s Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) fell by 2.3%, with margins narrowing significantly. Such indicators are leading to cautious sentiment among investors.
The general atmosphere surrounding renewable energy stocks and market volatility has also compounded these concerns. Investors appear to be wary amid corrections seen across the small-cap and mid-cap market segments. Market analysts have inferred these trends indicate broader market jitters, aligning NTPC Green Energy’s struggles with larger trends within the sector.
NTPC Green Energy, which focuses exclusively on renewable energies like solar and wind, is uniquely positioned within India’s rapidly changing energy economy. With the government's ambition of achieving 450 gigawatts of renewable energy capacity by 2030, the potential long-term growth for companies like NTPC Green could remain strong if they can navigate through these turbulent market conditions.
Experts suggest the recent volatility is not uncommon for newly listed stocks post-IPO, especially when the dynamics around the investor base shift significantly. "Until NTPC Green demonstrates stronger financial outcomes and addresses operational pressures, volatility may continue for those considering this once-promising IPO," noted one market analyst.
Despite the sharp decline, NTPC retains control over the majority of shares, holding approximately 89% of NTPC Green Energy through its strategic divestments. The management’s capability to adjust to the antagonistic market conditions, combined with the firm’s commitment to capitalizing on renewable energy opportunities, will remain pivotal for its stock's performance moving forward.