NTPC Green Energy, Avanse Financial Services get green signal from SEBI; VMS TMT withdraws IPO papers

NTPC Green Energy IPO

NTPC Green Energy, and Avanse Financial Services have received approval from the capital markets regulator SEBI to go ahead with their IPO plans. However, VMS TMT has decided to withdraw its draft papers filed for fund raising via an IPO.

The market regulator has issued observation letters to NTPC Green Energy, and Avanse Financial Services on October 22 and October 23, respectively.

In SEBI parlance, the issuance of observation letter on the draft papers means the company can launch its IPO within the next year from the date of issuance of observation letter.

NTPC Green Energy, the wholly-owned subsidiary of country's largest power producer NTPC, had filed draft red herring prospectus (DRHP) with the regulator on September 18 this year to raise Rs 10,000 crore through initial share sale.

It will be an entirely fresh issue by the company with no offer-for-sale component. Hence, the entire net issue proceeds will go to the company which will use Rs 7,500 crore out of those proceeds for repaying debt and the remainder for general corporate purposes.

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As of July 2024, India's largest renewable energy public sector enterprise had outstanding borrowings of Rs 16,235 crore on a consolidated basis.

Adani Green Energy is the only listed peer for NTPC Green in India.

The merchant bankers handling NTPC Green Energy IPO are IDBI Capital Markets & Securities, HDFC Bank, IIFL Securities, and Nuvama Wealth Management.

Kedaara Capital-backed non-banking finance company Avanse Financial Services, which had filed IPO papers on July 31 this year, targets to raise Rs 1,000 crore through fresh issue and Rs 2,500 crore via offer-for-sale.

Promoter entity Olive Vine Investment, an affiliate of global private equity firm Warburg Pincus, will be selling Rs 1,758 crore in the offer-for-sale, while Rs 742 crore worth shares will be sold by investors International Finance Corporation and Kedaara Capital Growth Fund III LLP.

Promoters own 59.32 percent shareholding in Avanse Financial, while the 40.68 percent shares are held by public shareholders including International Finance Corporation, Kedaara Capital, and Alpha.

The Mumbai-based company, the second largest education focused NBFC in India by assets under management, will utilise fresh issue funds for augmenting its capital base to meet its future capital requirements arising out of growth of business and assets.

Kotak Mahindra Capital Company, Avendus Capital, JP Morgan India, Nomura Financial Advisory and Securities (India), Nuvama Wealth Management, and SBI Capital Markets are the merchant bankers to the issue.

However, Gujarat-based VMS TMT has decided to withdraw its draft papers on October 23. The thermo mechanically treated (TMT) bars manufacturer had filed DRHP with the SEBI on September 27 for the IPO of 1.5 crore shares.