Green stocks have been getting absolutely slaughtered since Donald Trump won (well, they were suffering even before that.) Except in India.
Indian solar stocks have been in a league of their own, with many doubling or even tripling in value this year. 🚀
Check this out: Premier Energies has returned a cool 140% in just 10 weeks, while Waaree Energies, fresh off the IPO runway, has delivered a not-so-shabby 80%. Missed out? Don’t sweat it – the action is far from over.
🎬 Enter NTPC Green Energy. The company listed at a 3.3% premium yesterday (27 November.) That’s a kinda lean start BUT it closed 12.6% up on listing day.
Why should you keep an eye on this stock? NTPC Green is backed by its namesake 50-year-old OG in India’s energy space.
- The play? A state-backed giant is going all-in on green energy to make the most of the state’s largesse around renewable energy. 🌱
- The vibe? Total plug-in to India’s big green revolution, because NTPC is ALREADY a massive energy producer. (Few hiccups here, hopefully.)🌍
Hyundai hangover?
Not really. While the Nifty 50 has fallen by over 10% from its September peak after foreign investors bolted, solar stocks have mostly held their ground, losing just 5%. Three solar stocks have even managed to post double-digit gains!
Hyundai India’s flop IPO showing hasn’t slowed down investors chasing the next big thing in solar – and elsewhere.
Take Waaree, India’s largest solar energy company by installed capacity. It debuted just a week after Hyundai’s lackluster IPO and is still trading at a 66% premium over its issue price.💰
The sun’s still shining
It’s not just irrational exuberance that is driving the hype. Earnings at these solar firms are growing fast, really fast (just like Nvidia). Profits have more than doubled every year if taken on average.
- Adani Green, Zodiac Energy, KPI Green, Websol Energy, Gensol Engineering, Insolation Energy and Solex Energy have given returns on average of 256% between November 2023 and this month.
- A new government scheme offering $9 billion worth of incentives for the installation of rooftop solar panels is adding fuel to this rally.
India wants 500 gigawatts of its energy to come from clean sources by 2030 – a massive jump from about 91GW now.
Solar energy is a cash-eating beast with large solar farms needing mountains of $$$ to get off the ground. But companies are hunting for cash and importantly, investors are ready to talk.
Why? Because the Indian government has been dishing out fat subsidies and incentives to make the solar play irresistible.
But there’s one big cloud on the horizon.
Bitter brew
The US charged Gautam Adani — the billionaire owner of Adani Group’s solar energy company Adani Green — with corruption charges. Tbh, Adani Green was already the worst performer during a decline in Indian stocks, with a drop of 46% due to regulatory challenges even BEFORE the US indictment.
But the overhang this creates now… Well, let’s say it’s worth keeping an eye on this story as the indictment points at the involvement of several Indian government officials.
Read More: Adani’s downward spiral is not your buy-the-dip moment – MONIIFY
One more thing
Never go full FOMO. The red tape around solar projects in India and the country’s deep dependency on China for key components should give you pause.
China is the OG when it comes to critical solar parts. Only a couple of Indian players make them right now and not on a scale that can make a dent in China’s dominance. A Global Trade and Research Initiative report reconfirms this: India’s dream of hitting 500 GW in clean energy is basically impossible without China’s help. India’s annual solar imports bill could run up to $30 billion. (Yikes!)
India and China have made some headway in their otherwise tense relations recently, tho. So sunny times ahead?
