Tata Power is a part of the Tata Group, one of India’s largest conglomerates with interests in steel, automobiles, information technology, power, chemicals and consumer products. Tata Group was founded by Jamshedji Tata in 1868. Tata Group today comprises over 100 companies with operations in more than 100 countries across six continents.
The group’s revenues are in excess of US$ 100 billion with over 606,000 employees worldwide. Tata Sons Limited is the holding company of the Tata Group and holds the bulk of shareholding in group companies including Tata Power.
Tata Power as a company is involved in the production, distribution, and transmission of power. Based in Mumbai, Maharashtra, it is India’s largest renewable company, with a whooping capacity of 2.6 GW spread across multiple states. Most shares of the Tata Group have been gaining well recently. Among these stocks, Tata Power share price has also been soaring high, making it the most promising stock to invest in.
But what is making Tata Power share prices surge, and what are the benefits of investing in them?
- Demand for electricity
The demand for electricity in India grew to approximately 4.9% in the first half of October 2021, shortening the demand by 1.4%, despite there being a rise of 3.2% in coal-fired generation and about 30% rise in solar output. Also, an increased economic activity post-COVID-19 has increased the demand for electricity, which has resulted in a deficit of supply, mainly due to the coal shortage.
This has led the urban population to shift focus on clean, reliable, and affordable power supply, enabling growth in the power industry.
- Focus on renewable energy
Tata Power is India’s largest renewable company, with a power capacity of 2.6 GW spread across 11 states. The company currently accounts for 30% of renewable power capacity and targets to take it as high as 80% by 2030. It also aims at taking its renewable power production from 2.6 GW to 15GW by 2025.
- Fundraising for the IPO
Tata Power plans at raising funds for the IPO of the renewable energy unit. The company is in talks with pension and sovereign asset managers, including the Canadian Pension Plan Invest Board, the Government of Singapore, etc. They also aim at receiving some funds from the US and the Middle East.
- Establishment of charging stations for electric vehicles
Tata power NSE has been on a roll due to increased transactions taking place at the electric vehicle (EV) charging stations in the country. India has over 70,000 petrol pumps, meaning that the country must have many charging stations soon when cars are powered solely by electricity.
Today, with the growing number of electric motorcycles in the country, that day is not far away when the demand for electric motorcycles and cars increases and would need EV charging stations readily available to people. Taking things in their stride, Tata Power has been making headlines about establishing charging stations for electric vehicles in the country.
Currently, Tata Power has installed approximately 961 EV charging stations and aims at establishing 2000 EV charging stations by the year-end.
Some additional benefits are:
- Tata power share is one of the most valuable and trusted investments in India.
- Tata Power is not just an electricity generation and distribution company but also has presence in other segments like coal, transmission, renewables, etc.
- Tata Power share price has given good returns in the past and is expected to do well in the future as well.
- Tata Power is a dividend paying company and has been consistently paying dividends for the last 10 years.
- The company has a strong balance sheet with low debt levels.
- Tata Power also has a good track record of executing projects on time and within cost.
- The company has a well-diversified business mix which provides it with stability and resilience even during tough times.
- Tata Power is a very safe and sound investment option which can provide good returns in the long run.
Today, Tata Power has shown growth in quarterly net profits with an increased profit margin. It has seen an increase in profits every quarter for the last two years, and therefore, Tata Power share price NSE is proving to be the most promising stock to invest in.
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