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Shares of Tata Power Company rose as much as 4 percent on Monday, likely reacting to a report that said Saudi Arabia’s Public Investment Fund may buy a stake in the power company.

Public Investment Fund is looking to buy a stake in Tata Power’s green energy, power transmission and distribution businesses, according to a report by Mint.

The due diligence by the sovereign wealth fund has been done, as per the report.

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The proposed investment by Public Investment Fund is in addition to BlackRock and the UAE’s sovereign wealth fund Mubadala Investment Co.’s plan to invest in a new energy entity being floated by Tata Power.

Likely monetisation of renewable energy business portfolio would unlock value and also deleverage balance sheet of Tata Power, domestic brokerage house Sharekhan had said in a research report earlier this month.

Sharekhan says ‘buy’ the power company’s stock because it has multiple levers for earnings upgrades and better valuation, which are only partially captured in its stock price. The brokerage house has a target price of Rs 315.

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At 10:02 am, shares of Tata Power were trading 2.5 percent higher at Rs 285.15 on BSE. The stock has been gaining for the last two days and has risen 2.5 percent during the period.

The stock is about 5 percent away from its 52-week high of Rs 298.

In the past month, the stock rose 22 percent and it has gained over 290 percent in the past three years.

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