Power Grid Corporation shares jump 5% today; here's why

Shares of Power Grid Corporation Ltd surged 5.38 per cent in Thursday's trade to hit a high of Rs 289.10. It was last seen trading 3.63 per cent higher at Rs 284.30 today. At this price, the scrip has gained 19.58 per cent in 2024 so far and 64.63 per cent in the past one year.

Today's sharp rise in the share price came after the company announced that it has emerged as successful bidder in tariff-based competitive auctioning for establishing inter-state transmission systems. These projects will be executed on a build, own, operate, and transfer (BOOT) basis, the company stated in a BSE filing

Separately, the state-owned firm's board has approved a proposal to raise up to Rs 12,000 crore through the issuance of bonds in one or more tranches in 2024-25.

"Committee of Directors for Bonds in their meeting held on April 17, 2024 has approved the raising of Bonds as Unsecured, Non-convertible, Non-cumulative, Redeemable, Taxable Power Grid Bonds Issue(s) during FY 2024-25 in one or more tranches/series up to Rs 12,000 crore," it said.

Analysts largely suggested positive views on the counter. "PowerGrid could be a good play on the transmission sector. The margin of security in significantly higher at current levels," Vinit Bolinjkar, Head of Research at Ventura Securities, told Business Today TV.

"The stock is looking promising on charts. On a positional basis, we expect the stock to see Rs 300-305 levels. Keep stop loss placed at Rs 276," said Rajesh Palviya, Head Technical Research at Axis Securities.

The counter traded higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). The stock's 14-day relative strength index (RSI) came at 57.62. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The company's stock has a price-to-equity (P/E) ratio of 13.38. Earnings per share (EPS) stood at 4.08.