Power stocks rose 2-4 percent following announcements for incentivising power distribution reforms and augmentation of intra state transmission.
While stock like NTPC and CG Power gained during the session, stocks such as Power Grid, PFC, REC were trading around 2 percent lower.
On February 1, the Finance Minister Nirmala Sitharaman announced the Union Budget 2025-26. In the speech, she said noted that the focus will be to incentivise power distribution reforms and augmentation of intra state transmission.
Additionally, under the Nuclear energy mission for Viksit Bharat, the Government has set a goal of 100 GW of nuclear energy by 2047. Rs 20,000 crore has also be allocated to develop small modular reactors. Five of the reactors will be operational by 2033.
The Finance Minister also announced a National Manufacturing Mission to support clean tech manufacturing to support domestic production of EV batteries, solar panels.
In the power sector, industry players were closely tracking the Budget for announcements in clean energy, besides those to improve transmission and distribution.
Though power-related initiatives are rolled out throughout the year, analysts and industry insiders were listening for any special mentions made for the renewables sector, particularly for storage solutions, and on smart metering.
In the previous Budget, the Ministry of New and Renewable Energy (MNRE) saw its allocation surge to Rs 19,100 crore, 143 percent higher than the revised estimate for 2023-24. This increase was largely attributed to the PM Surya Ghar Muft Bijli Yojana, which aims to encourage solar-power consumption by households.
In a pre-Budget conversation, Satyajit Jain of Ambit told Moneycontrol that the subsidy was expected to help achieve 30 GW of rooftop solar capacity in two to three years. He added, "As renewable energy grows, the demand for storage solutions becomes even more critical."
The other focus in the power sector has been on better transmission and distribution solutions, through smart metering. In a pre-Budget conversation, Shivam Bajaj of Avener Capital told Moneycontrol that increased capital expenditure was the need of the hour.
He said, “In the Transmission and Distribution (T&D) segment, the main challenge has been the slow pace of project execution and capital expenditure. Increased CAPEX allocations could accelerate these projects, particularly on the renewable energy side".
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