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Power Stocks Slide Despite ₹1.86 Lakh Crore Grid Scheme
Several large power-company stocks fell on Thursday.
This happened even though the government approved a very large power-grid investment plan.
The PM-DHARA Scheme will improve electricity transmission within states.
It also plans to add batteries that can store electricity from sources such as solar and wind.
These upgrades could help move more renewable power to places that need it.
The government wants the plan to support up to 135 gigawatts of renewable energy.
Jefferies expects some power companies to benefit from stronger electricity demand and higher market prices.
However, power plants are facing tight coal supplies.
This is why investors remained cautious even as the long-term policy outlook appeared supportive.
Tata Power, Torrent Power, Adani Power, Power Grid and NTPC declined between 1.1% and 1.7% in Thursday’s trading session.
The Union Cabinet approved the ₹1.86 lakh crore PM-DHARA Scheme to strengthen intra-state transmission and integrate renewable energy.
The scheme includes ₹50,000 crore for 50 GWh of battery storage and aims to evacuate up to 135 GW of renewable power.
The project is targeted for completion by FY 2032-33 and includes ₹54,082 crore in Central Financial Support.
Jefferies remains positive on the sector, citing stronger electricity demand, higher merchant prices and execution-led growth.
- Who
- The Union Cabinet, Prime Minister Narendra Modi, power companies and Jefferies are central to the report.
- What
- Power stocks declined while the government approved the ₹1.86 lakh crore PM-DHARA Scheme for transmission and renewable-energy integration.
- Where
- The scheme applies to India’s intra-state power-transmission systems across states and Union Territories.
- When
- The stock declines occurred on Thursday; the Cabinet approved the scheme on Wednesday.
- Why
- Stocks faced pressure amid supply concerns, including low coal inventories, while the scheme aims to expand grid capacity and support renewable-energy evacuation.
Market Caution
Policy and Sector Optimism
Near-term stock performance
Market Caution
Major power stocks declined despite the Cabinet’s approval, indicating investor caution about immediate sector conditions.
Policy and Sector Optimism
The transmission and storage investment could increase future demand for grid infrastructure, transformers, substations and energy-storage systems.
Power supply conditions
Market Caution
Thermal plants have around seven days of coal stocks, more than 40% have less than 25% of required inventory, and the Ministry of Power is considering compulsory imported-coal blending.
Policy and Sector Optimism
Jefferies expects stronger electricity demand and higher merchant power prices to support utilities’ earnings trajectory.
Investment outlook
Market Caution
Power companies face operating pressures because electricity demand has risen faster than expected while coal availability is tighter.
Policy and Sector Optimism
Jefferies identified Adani Energy Solutions, JSW Energy and NTPC as top picks, citing execution-led growth and more than 20% visible medium-term EBITDA growth for Adani Energy Solutions.
Key facts
- Scheme
- PM-DHARA stands for PM-Developing Harmonized and Accelerated Renewable-energy Access.
- Total project outlay
- ₹1,86,405 crore
- Transmission allocation
- ₹1,36,378 crore for intra-state transmission systems under GEC-III
- Battery storage allocation
- ₹50,000 crore for 50 GWh of Battery Energy Storage Systems
- Renewable-energy evacuation
- Up to 135 GW
- Central Financial Support
- ₹54,082 crore
- Target completion
- FY 2032-33
Sources
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