NHPC surges 5% as firm signs purchase pact with Rajasthan government

NEW DELHI: Shares of NHPC surged up to 5 per cent after the company signed a power purchase pact with Rajasthan government and INOX for a 50 mw wind power project in the state.

The power project will take place in Jaisalmer and the Rajasthan government will purchase the power generated from the project.

NHPC stock jumped 4.93 per cent to hit a high of Rs 25.50 on BSE. The scrip had hit a 52-week high of Rs 28.20 on August 31.

India Ratings in a recent note pointed out that NHPC operates its plants on the cost-plus regime, which provides a post-tax return of equity of 15.5-16.5 per cent, along with reasonable recovery of all costs.

This allows for high cash-flow predictability, said the rating agency, which has assigned AAA rating to company’s long-term loans and bonds.