F&O Ban on Tata Power Shares
Tata Power shares have been made to bear the brunt of the trade ban imposed on Thursday, April 21, 2022. This ban applies to the National Stock Exchange (or NSE’s) futures and options (or F&O) segment. The reason why this F&O ban has been imposed stems from the fact that this stock has surpassed the 95 percent market-wide position limit (or MWPL). This position outlines the maximum number of open positions permitted under F&O contracts of the concerned stock. The NSE is responsible for keeping the public abreast of which securities will be banned for trade on a daily basis.
The stock exchange went on to announce that clients and members would be permitted to trade in the derivative contracts of this security only so long as they decrease their positions by taking on offsetting roles. In the event that any open positions are taken, penal and disciplinary action will be pursued by the NSE.
In instances of an F&O ban being active and applying to a given stock, no fresh positions are permitted with reference to the said stock. Stock exchanges determine what the MWPL will amount to, and this figure sets the stage for what the greatest number of contracts can be open at any point in time. Presently, if the open interest surpasses 95 percent of the MWPL, the stock is banned. Owing to this very fact, Tata Power shares are categorized as stocks under the F&O ban.
A Brief History of Tata Power Company
The year 1919 saw Tata Power Company Ltd be incorporated. Fast forward to 2022 and it is classified as a mid-cap company with a market capitalization of INR 79,723.72 crores. It operates within the power sector and its key products and offerings focus on the power supply. Its revenue segments include this as well as income from finances leases, project management fees and other operating revenue.
As far as the quarter that ended on December 31, 2021, is concerned, the company saw a consolidated total income (or CTI) that amounted to INRN 11,078 crores which is indicative of an 8.16 percent hike from the previous quarter’s total income that amounted to INR 10,187.33 crores. When December 31, 2021, CTI is set against that of the previous year’s, it indicates a hike of 43.05 percent as the CTI on December 31, 2020, amounted to INR 7702.84 Crores. The most recent quarter saw Tata Power Company report a net profit after tax amount to – INR 106.17 crores.
Check Tata Power Share Price
Looking to a Future in Clean Energy
The power company seeks to direct INR 60,000 Crores towards the expansion of its clean-energy business paradigm over the span of the next 5 years.
Of this figure, 75 percent of the funds will be generated via debt while the remaining 25 percent will be raised via equity. The company also hopes to maintain a leverage ratio that ranges between 1.5 and 1.6 times following expansion. Presently, the current renewable energy portfolio of Tata Power Company Ltd. is 4.9 gigawatt of which 1.6 GW are under construction. By the financial year 2027, the company hopes to scale it such that it surpasses 20 GW.
Factors ranging from power purchase agreements and quality of equipment to offtake arrangements and assets will be taken into account such that inorganic acquisition within the renewables space can be tackled effectively by Tata Power.
India has pledged to turn carbon neutral by 2070 owing to which several companies have moved towards hydrogen, wind and solar power, and several billionaires have sought to commit billions to green energy such that they can benefit from the same.
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Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.