NTPC Green Energy, a wholly-owned subsidiary of NTPC Ltd, is gearing up for its highly anticipated initial public offering (IPO) on November 19, 2024.
As a leading player in India’s renewable energy sector, NTPC Green Energy aims to raise ₹10,000 crore through the IPO, offering investors a chance to be part of the country’s clean energy growth story.
The bidding for the issue will remain open until November 22, with shares expected to list on both the NSE and BSE on November 27.
Key IPO Details
NTPC Green Energy’s IPO is entirely a fresh issue of up to 92.68 crore equity shares. The company has set a price band of ₹102-109 per share, with investors required to apply for a minimum lot size of 138 shares and in multiples thereafter.
| IPO Metrics | Details |
|---|---|
| Price Band | ₹102 – ₹109 |
| IPO Size | ₹10,000 crore |
| Fresh Issue | 92.68 crore equity shares |
| Bidding Dates | November 19 – November 22 |
| Minimum Lot Size | 138 shares |
| Listing Date | November 27, 2024 |
The IPO will allocate 75% of the issue to qualified institutional buyers (QIBs), 15% to non-institutional investors (NIIs), and 10% to retail investors. Additionally, shares worth ₹200 crore have been reserved for NTPC employees at a discounted rate of ₹5 per share.
Use of Proceeds
The net proceeds from the NTPC Green Energy IPO will be utilized to fuel the company’s ambitious expansion plans in the renewable energy sector. Key areas of investment include:
- Investment in Subsidiary: A significant portion of the funds will go towards NTPC Renewable Energy (NREL) to support its ongoing and future solar and wind projects.
- Debt Repayment: The company plans to use a part of the proceeds to repay or prepay certain outstanding borrowings, improving its financial health and reducing interest costs.
- General Corporate Purposes: Remaining funds will be allocated for general corporate purposes, including operational enhancements and potential acquisitions.
NTPC Green Energy’s Operational Capacity
As of August 31, 2024, NTPC Green Energy had an operational capacity of 3,071 MW from solar projects and 100 MW from wind projects.
The company’s portfolio includes a mix of operating projects and contracted capacity, positioning it as a key player in India’s push for clean energy.
| Operational Capacity | Details |
|---|---|
| Solar Projects | 3,071 MW |
| Wind Projects | 100 MW |
| Total Capacity | 3,171 MW |
| Contracted Projects | 11,771 MW |
The company’s extensive portfolio and strategic focus on renewable energy make it an attractive investment option, especially as India continues to ramp up its clean energy initiatives.
Grey Market Premium (GMP) and Market Sentiment
The Grey Market Premium (GMP) for NTPC Green Energy shares has fluctuated ahead of the IPO launch. Initially, the GMP stood at ₹25, indicating strong investor interest.
However, recent market volatility has caused the GMP to drop to ₹9-10, suggesting a potential listing pop of about 12% over the upper end of the price band.
Analysts are closely watching the GMP trends, as they often serve as an early indicator of investor sentiment.
Despite the drop, the IPO remains one of the largest in 2024, following successful offerings from Hyundai Motors India and Swiggy.
Financial Performance and Growth Outlook
NTPC Green Energy has shown steady financial performance, driven by its diversified renewable energy projects.
For the quarter ended June 30, 2024, the company reported a net profit of ₹138.61 crore and total revenue of ₹607.42 crore.
| Financial Metric | Q1 FY2025 | FY2024 |
|---|---|---|
| Net Profit | ₹138.61 crore | ₹344.72 crore |
| Revenue | ₹607.42 crore | ₹2,037.66 crore |
The strong financials and growth in the renewable energy segment highlight NTPC Green Energy’s potential to deliver solid returns for investors.
The company’s focus on solar and wind projects aligns with India’s renewable energy targets, providing a favorable growth outlook.
Expert Opinions and Brokerage Views
Analysts have mixed views on NTPC Green Energy’s IPO, with most recommending it for long-term investors due to its strong renewable energy focus.
- IDBI Capital Market Services: The firm has given a ‘Subscribe’ rating, highlighting the company’s solid project pipeline and growth potential in the renewable energy sector.
- HDFC Bank: The brokerage views the IPO as a good opportunity for investors seeking exposure to India’s growing renewable energy market but advises caution due to recent market volatility.
- IIFL Securities: The firm has a positive outlook, citing NTPC Green Energy’s strong financials and strategic focus on clean energy.
Conclusion: Should You Invest in NTPC Green Energy IPO?
NTPC Green Energy’s IPO presents an attractive investment opportunity, especially for those looking to capitalize on the growing demand for renewable energy in India.
The company’s strong project portfolio, strategic expansion plans, and focus on debt reduction make it a compelling choice for long-term investors.
However, potential investors should be mindful of market conditions and the recent fluctuations in GMP before making a decision.
Disclaimer
The information provided in this article is for educational purposes only and should not be considered financial advice. Investments in IPOs carry market risks. Please conduct your own research or consult with a financial advisor before making any investment decisions.
