Surge in Open Interest Signals Renewed Investor Confidence in Torrent Power Ltd.

Open Interest and Volume Dynamics

On 10 Feb 2026, Torrent Power’s open interest in derivatives jumped to 18,741 contracts from 14,747 the previous day, marking a substantial increase of 27.08%. This rise of 3,994 contracts is accompanied by a daily volume of 42,429, indicating active trading and fresh positioning by market participants. The futures segment alone accounted for a value of approximately ₹27,102 lakhs, while the options segment’s notional value stood at an impressive ₹24,364.7 crores, culminating in a total derivatives value of ₹32,304.6 lakhs.

The underlying stock price closed at ₹1,478, touching an intraday high of ₹1,506, a 5.52% rise, outperforming the power sector’s 0.33% gain and the Sensex’s modest 0.16% advance. Torrent Power’s weighted average traded price skewed closer to the day’s low, suggesting that while the stock rallied intraday, significant volume was executed at lower price points, possibly indicating accumulation by institutional investors.

Market Positioning and Technical Indicators

Technical analysis reveals Torrent Power is trading above all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – signalling a strong bullish trend. The delivery volume on 9 Feb surged to 6.9 lakh shares, a remarkable 121.84% increase over the five-day average, underscoring rising investor participation and conviction in the stock’s near-term prospects.

Liquidity remains robust, with the stock’s average traded value supporting trade sizes up to ₹1.9 crore without significant price impact, making it attractive for both retail and institutional traders. The market cap stands at ₹73,260 crore, categorising Torrent Power as a mid-cap stock with a Mojo Score of 55.0 and a Mojo Grade upgraded from Sell to Hold on 8 Jul 2025, reflecting improving fundamentals and market sentiment.

Interpreting the Open Interest Surge

The 27.08% increase in open interest alongside rising volume suggests fresh directional bets are being placed rather than mere squaring off of positions. This is often interpreted as a sign of strengthening trend momentum. Given the stock’s outperformance relative to the sector and benchmark indices, it is plausible that traders are positioning for further upside in Torrent Power.

Options data, with a notional value exceeding ₹24,000 crores, indicates significant hedging and speculative activity. The large open interest in options could be reflective of strategies such as long calls or protective puts, signalling a nuanced approach by market participants balancing risk and reward amid prevailing market conditions.

Sectoral and Broader Market Context

Within the power sector, Torrent Power’s relative strength is notable. The sector’s modest 0.33% gain contrasts with Torrent Power’s near 4% rise, highlighting the stock’s leadership. This outperformance is supported by improving fundamentals, including stable cash flows and strategic investments in renewable energy projects, which have enhanced investor confidence.

Moreover, the upgrade in Mojo Grade from Sell to Hold reflects a reassessment of the company’s growth trajectory and risk profile. While the Mojo Score of 55.0 suggests moderate conviction, the positive price action and volume trends indicate growing market interest that could potentially lead to further upgrades if momentum sustains.

Investor Implications and Outlook

For investors, the surge in open interest and volume in Torrent Power’s derivatives market signals an opportune moment to reassess portfolio exposure. The stock’s technical strength, combined with rising delivery volumes and liquidity, supports a cautiously optimistic outlook. However, the Hold rating advises measured participation rather than aggressive accumulation at this stage.

Market participants should monitor upcoming quarterly results and sectoral developments, particularly government policies on power tariffs and renewable energy incentives, which could materially impact Torrent Power’s earnings and valuation.

Conclusion

The recent spike in open interest and volume in Torrent Power Ltd.’s derivatives market underscores a renewed investor focus on the stock amid a broadly stable power sector environment. The stock’s technical positioning above key moving averages, coupled with rising delivery volumes and liquidity, supports a constructive near-term outlook.

While the Mojo Grade remains at Hold, the upgrade from Sell and the positive price action suggest improving fundamentals and market sentiment. Investors should remain vigilant to sectoral developments and earnings updates, using the current momentum as a basis for selective exposure rather than broad-based accumulation.

Overall, Torrent Power’s derivatives activity provides valuable insight into market positioning and potential directional bets, signalling that the stock is attracting increased attention from both institutional and retail participants.

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