Green Stocks Nov 25-  The Struggle To Arrest Downslide Continues

The small-cap and midcap indices, which have lagged behind the main Nifty and BSE Sensex for most of this month, finally had a better day today, but with little to no joy for the green energy stocks that belong to the category. The stark contrast between the large-cap indices and these continues to hurt and hurt big time, as many investors are discovering.  Five of the 6 recent solar IPOs are trading below their IPO price, and in some cases, the gap has already opened up to 20% or higher, making the wait for a recovery that much longer for investors in these stocks.

While it remains difficult for investors to parse the good news from the bad, with the latter hanging heavy due to the project cancellation issue, spare a thought for the firms in line for an IPO.

The recent experience with the green energy pack will leave little appetite pf the kind the earlier issues benefited from among investors. The next lot of IPOs will have to not just sell a strong narrative but do it at a price that is truly attractive. PEs at a significant premium to the average Nifty PE frankly were never a great idea, and firms will be under pressure to price more conservatively. Market experts believe Q3 results will probably be good enough to make current prices very attractive by the time January end rolls around with all the results, but that could still mean a very poor year in calendar 2025 for loyal investors who stayed invested.   

The large developer firms, which have the bigger investments, have been disappointing, although with none of the volatility that smaller EPCs and manufacturers have seen. PSU renewable energy firms like SJVN have been particularly hit, and recovery there seems unlikely in the medium term. Even NTPC Green will hope to outshine parent NTPC, which is weighed down by mandated investments into nuclear, green hydrogen and other pet projects of the government with a much more uncertain returns profile.

List of Green Stocks