The Rs 10,000-crore mega IPO of NTPC’s renewable energy arm NTPC Green Energy Ltd opened for subscription today, November 19, and will close on November 22. The IPO, the largest by a PSU firm in the renewable energy space, aims to capitalise on India’s ambitious clean energy goals, offering investors a stake in the country's clean energy transition.
Price band and bidding lot
The price band for the IPO has been fixed at Rs 102-108 per share. Investors can bid for a minimum of 138 shares and in multiples of 138 shares thereafter. For retail investors, the minimum investment will amount to Rs 14,904, with a maximum permissible investment of Rs 1,93,752 for 13 lots.
Public issue structure
The IPO comprises an entirely fresh issue of nearly 96 crore equity shares, including anchor book, with no offer-for-sale component. The allocation of the public portion of the issue (net of anchor allocation) is divided as follows:
- Qualified Institutional Buyers (QIBs): 44 percent of the net issue.
- Non-Institutional Investors (NIIs): 22 percent of the net issue.
- Retail Investors: 14 percent of the net issue.
- Shareholders: Rs 1,000 crore worth of shares are reserved for NTPC shareholders.
- Employees: Rs 200 crore worth of shares are reserved for employees, offered at a Rs 5 discount to the final price.
Anchor book allocation
On November 18, NTPC Green Energy already raised Rs 3,960 crore via the anchor book, allocating 36.67 crore equity shares to marquee investors at Rs 108 per share.
Key global anchor investors include Goldman Sachs, Morgan Stanley, the Government of Singapore, and Abu Dhabi Investment Authority. On the domestic front, LIC of India, ICICI Prudential Mutual Fund, Nippon Life India, and Kotak AMC were among the major participants. Of the total allocation, 14.53 crore shares were subscribed by 16 domestic mutual funds through 72 schemes.
Use of proceeds from NTPC Green Energy IPO
The company plans to utilise Rs 7,500 crore from the IPO proceeds to reduce the debt of its subsidiary, NTPC Renewable Energy. This will cut its outstanding borrowings from Rs 17,057.5 crore as of September 2024 to Rs 9,557.5 crore. The remaining funds will be used for general corporate purposes.
NTPC Green Energy shares listing date
The shares are scheduled to list on the BSE and NSE on November 27. The grey market premium (GMP) for NTPC Green Energy Ltd's initial public offering (IPO) has declined this week.
According to market watchers tracking grey market trends, NTPC Green Energy shares were trading at a GMP of Rs 1-2 in the unofficial market. This indicates modest expectations for listing gains. The current GMP represents a dip compared to last week's levels, when the shares commanded a premium of 2.78 percent.
BROKERAGE VIEWS: SHOULD YOU SUBSCRIBE TO NTPC GREEN ENERGY IPO?
Several brokerages have given a positive outlook for NTPC Green Energy’s IPO. Here’s what they say:
Cholamandalam Securities: Assigned a 'SUBSCRIBE' rating, citing NTPC Green Energy’s robust capacity expansion pipeline and strategic positioning in renewable energy.
Anand Rathi: Rated ‘SUBSCRIBE for LONG TERM’, citing strong parentage, low operating costs, and a diversified capacity portfolio.
KR Choksey: Assigned a ‘SUBSCRIBE’ rating, noting the valuation is attractive at an EV/EBITDA of 23.2x on FY24 EBITDA compared to peers.
Geojit Financial Services: Recommended 'SUBSCRIBE' for long-term investors, expecting an expansion in the NTPC Green Energy’s portfolio, investment in green hydrogen, and next-generation energy solutions.
BUSINESS AND OPERATIONAL UPDATES
Expanding renewable capacity
NTPC Green Energy is the largest renewable energy public sector enterprise in India by operational capacity, excluding hydro. As of September 2024, the company had an impressive portfolio comprising 3,220 MW of operational solar power projects and 100 MW of wind projects spread across six states.
Additionally, it has 13,576 MW of contracted and awarded projects, along with a further 9,175 MW of capacity under development through memoranda of understanding and term sheets. This brings its total capacity, including operational, contracted, and pipeline projects, to a substantial 26,071 MW.
The PSU has a target of reaching 60 GW of renewable energy capacity by FY32. It aims to add 3 GW of capacity in FY25, followed by 5 GW in FY26, and scale its operational renewable capacity to 19.4 GW by FY27. It has large-scale renewable projects in works, such as the 2.45 GW solar power project in Khavda, Gujarat.
In addition to solar and wind projects, NTPC Green Energy is also investing in green hydrogen and grid-scale battery storage. The company is developing a green hydrogen hub at Pudimadaka in Andhra Pradesh and has set its sights on building 2 GW of round-the-clock renewable energy capacity. Among these is one of the world’s largest 24/7 renewable projects, with a capacity of 1.3 GW.
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