NTPC Green Energy IPO has officially opened for subscription today, November 19, 2024, and will close on November 22, 2024. With a price band set below Rs 110 per share, the IPO aims to raise approximately Rs 10,000 crore to bolster the company’s expansion in the renewable energy sector. Anchor investors began bidding on November 18, 2024. Post-IPO, NTPC Green Energy shares will be listed on the BSE and NSE, marking a significant milestone in the company’s journey toward sustainable energy solutions.
NTPC Green Energy is primarily focused on renewable energy generation, with 95% of its revenue coming from solar power projects. The company currently operates 3.3 gigawatts (GW) of solar capacity and 100 megawatts (MW) of wind capacity, with ambitious plans to ramp up production significantly over the coming years.
NTPC Green Energy IPO Overview
As India races towards its renewable energy goals, the NTPC Green Energy IPO has garnered significant attention in the energy sector. NTPC Green Energy Ltd (NGEL), a subsidiary of the public-sector giant NTPC, is focused on renewable power generation, especially solar energy, and is now set to launch its IPO. Here’s a closer look at the company, its growth potential, and the IPO details to help you decide if this could be a strong addition to your portfolio.
| IPO Detail | Information |
|---|---|
| IPO Type | Book-built issue |
| Issue Size | Rs 10,000 crore |
| Issue Type | Entirely a fresh issue |
| IPO Dates | Expected in the third week of November, likely to open on Monday, November 18, 2024 (subject to confirmation) |
| Price Band | To be announced |
| Listing | BSE and NSE |
This IPO will be the third to raise over Rs 10,000 crore in 2024, following Hyundai Motor India Ltd and Swiggy Ltd
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NTPC Green Energy GMP
NTPC Green Energy’s IPO, with a recent GMP of ₹9 as of November 13, 2024, aims to raise funds primarily to invest Rs 7,500 crore in its subsidiary, NTPC Renewable Energy Limited, for debt repayment. The remaining proceeds will support general corporate needs. The price band is yet to be confirmed, with updates expected soon
| GMP Date | IPO Price | GMP | Sub2 Sauda Rate | Estimated Listing Price | Last Updated |
|---|---|---|---|---|---|
| 27-11-2024 Listing | 108.00 | ₹1 Todays Movement - GMP No Change | 100/1400 | ₹109 (0.93%) | 27-Nov-2024 7:26 |
| 26-11-2024 | 108.00 | ₹1 Todays Movement - GMP Down | 100/1400 | ₹109 (0.93%) | 26-Nov-2024 22:29 |
| 25-11-2024 Allotment | 108.00 | ₹2 Todays Movement - GMP Down | 200/2800 | ₹110 (1.85%) | 25-Nov-2024 22:30 |
| 24-11-2024 | 108.00 | ₹3.50 Todays Movement - GMP No Change | 400/5600 | ₹111.5 (3.24%) | 24-Nov-2024 22:28 |
| 23-11-2024 | 108.00 | ₹3.50 Todays Movement - GMP Up | 400/5600 | ₹111.5 (3.24%) | 23-Nov-2024 22:24 |
| 22-11-2024 Close | 108.00 | ₹2.50 Todays Movement - GMP Up | 300/4200 | ₹110.5 (2.31%) | 22-Nov-2024 22:29 |
| 21-11-2024 | 108.00 | ₹0 Todays Movement - GMP Down | -- | ₹108 (0%) | 21-Nov-2024 22:25 |
| 20-11-2024 | 108.00 | ₹0.80 Todays Movement - GMP No Change | 100/1400 | ₹108.8 (0.74%) | 20-Nov-2024 22:25 |
| 19-11-2024 Open | 108.00 | ₹0.80 Todays Movement - GMP No Change | 100/1400 | ₹108.8 (0.74%) | 19-Nov-2024 22:30 |
| 18-11-2024 | 108.00 | ₹0.70 Todays Movement - GMP Down | 100/1400 | ₹108.7 (0.65%) | 18-Nov-2024 22:30 |
| 17-11-2024 | 108.00 | ₹1 Todays Movement - GMP No Change | 100/1400 | ₹109 (0.93%) | 17-Nov-2024 22:25 |
| 16-11-2024 | 108.00 | ₹1 Todays Movement - GMP No Change | 100/1400 | ₹109 (0.93%) | 16-Nov-2024 22:26 |
| 15-11-2024 | 108.00 | ₹1.40 Todays Movement - GMP Down | 100/1400 | ₹109.4 (1.3%) | 15-Nov-2024 22:28 |
Expected Dates
| IPO Open Date: | November 19, 2024 |
|---|---|
| IPO Close Date: | November 22, 2024 |
| Basis of Allotment: | November 23, 2024 |
| Refunds: | November 26, 2024 |
| Credit to Demat Account: | November 26, 2024 |
| IPO Listing Date: | November 27, 2024 |
| Listing | BSE and NSE |
NTPC Green Energy IPO Price Bands
NTPC Green Energy’s IPO is set to open with a price band between Rs 102 and Rs 108 per share. The IPO, targeting to raise approximately Rs 10,000 crore, will be available for public subscription from November 19 to November 22, 2024, with bidding for anchor investors beginning on November 18. The shares will be listed on both the BSE and NSE following the IPO, offering investors a chance to participate in NTPC’s green energy initiatives at this price range.
NTPC Green Energy: Company Profile and Expansion Plans
Incorporated in April 2022, NTPC Green Energy focuses on renewable energy projects, including solar and wind, through organic and inorganic routes. With an operational capacity of 3,071 MW from solar projects and 100 MW from wind projects across six states, NTPC Green Energy has a robust portfolio:
- Operational Projects: 2,925 MW
- Contracted & Awarded Projects: 11,771 MW
To attract domestic and international investors, NTPC Green Energy plans to conduct roadshows across various locations, including Mumbai, London, Singapore, and the United States. The IPO launch aims to unlock significant value for NTPC Ltd by listing its renewable energy arm.
Reservation and Allotment Details
The IPO will have specific allotment quotas to accommodate a variety of investors:
- Qualified Institutional Buyers (QIB): 75% of the net offer
- Non-Institutional Investors (NII): 15% of the net offer
- Retail Investors: 10% of the net offer
- NTPC Ltd Shareholders: Reserved quota for NTPC shareholders as of the RHP filing date
- Eligible Employees: Separate reservation for NTPC Green Energy employees
Lead Managers and Registrar
The book-running lead managers include:
- IDBI Capital Market Services
- HDFC Bank
- IIFL Securities
- Nuvama Wealth Management
Kfin Technologies will serve as the registrar, managing the IPO application and allotment process.
Recent IPOs and Dalal Street Buzz
NTPC Green Energy’s IPO follows two major recent listings in India: Hyundai Motor India Ltd (Rs 27,856 crore) and Swiggy Ltd (Rs 11,327 crore). Hyundai’s IPO became the largest ever in India when it was listed in October 2024, while Swiggy’s IPO is set to conclude on November 8, with its market debut anticipated shortly after. NTPC Green Energy’s IPO could continue this streak of high-profile entries on Dalal Street.
Future Outlook
The NTPC Green Energy IPO is expected to attract substantial interest from institutional and retail investors alike. As India pushes towards renewable energy and sustainable growth, NTPC Green Energy’s listing provides an opportunity for investors to support a company with ambitious renewable energy targets and a strategic plan to expand both domestically and internationally.
Financial Information – NTPC Green Energy
NTPC Green Energy is backed by NTPC, which brings both credibility and financial stability. With a PE ratio of 16.33 and a dividend yield of 1.85%, the company’s financials reflect a solid foundation, albeit with some challenges.
| Period Ended | 30 Jun 2024 | 31 Mar 2024 | 31 Mar 2023 |
| Assets | 28,775.40 | 27,206.42 | 18,431.40 |
| Revenue | 607.42 | 2,037.66 | 170.63 |
| Profit After Tax | 138.61 | 344.72 | 171.23 |
| Net Worth | 6,370.75 | 6,232.14 | |
| Reserves and Surplus | 651.21 | 512.6 | 167.88 |
| Total Borrowing | 15,276.98 | 12,796.74 | |
NTPC Green Energy IPO Lot Size
Investors interested in the offering can place bids for a minimum of 138 shares and in multiples thereof. For retail investors, the minimum application consists of 1 lot (138 shares) amounting to ₹14,904, while the maximum application can include 13 lots (1,794 shares) at ₹193,752.
For Small High Net Worth Individuals (S-HNI), the minimum bid starts at 14 lots (1,932 shares) with an investment of ₹208,656, and the maximum bid can go up to 67 lots (9,246 shares) totaling ₹998,568. Big High Net Worth Individuals (B-HNI) can begin their bids at 68 lots (9,384 shares) with a minimum investment of ₹1,013,472.
NTPC Green Energy IPO Peer Comparison
| Company Name | EPS (Basic) | EPS (Diluted) | NAV (per share) (Rs) | P/E (x) | RoNW (%) | P/BV Ratio | Financial statements |
|---|---|---|---|---|---|---|---|
| NTPC Green Energy Limited | 0.73 | 0.73 | 10.90 | 5.53 | Consolidated | ||
| Adani Green Energy Ltd | 6.21 | 6.20 | 62.08 | 288.36 | 12.81 | 28.82 | Consolidated |
| Renew Energy Global PLC | 9.94 | 9.92 | 290.15 | 52.87 | 3.94 | 1.81 | Consolidated |
Valuation Concerns
The anticipated valuation of the IPO has raised some eyebrows, with a Price-to-Earnings (P/E) ratio for FY24 expected to be 235, indicating that the stock may be overvalued compared to other players in the sector. Furthermore, NTPC Green Energy operates in a capital-intensive industry and will need significant funding to achieve its ambitious expansion goals.
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Future Expansion Plans
NTPC Green Energy has aggressive expansion goals, aiming to increase its renewable energy capacity to:
- 6 GW by FY25
- 11 GW by FY26
- 19 GW by FY27
The long-term target is a massive 60 GW, which would require substantial capital investment. To meet this goal, the company has budgeted around ₹3 lakh crore in capital expenditure, with plans to diversify into green hydrogen and sustainable fuel production, including derivatives like methanol, ethanol, and sustainable aviation fuel. Although these new ventures currently contribute no revenue, they represent a promising avenue for future growth in the green energy sector.
Key Positives for Investors
Strong Government Backing and Parent Support
The company benefits from NTPC’s parent backing, which brings stability and a strong reputation in the energy market. The government’s commitment to renewable energy, with a 500 GW renewable energy target by 2030, also positions NTPC Green Energy for substantial growth as demand increases.
Long-Term Growth Potential
India’s renewable energy sector is set to grow significantly, with solar energy expansion across industries. This growth trajectory could benefit NTPC Green Energy as the company scales up its capacity and taps into new markets like green hydrogen and battery storage.
Exclusive Shareholder Opportunity
Existing NTPC shareholders have a unique advantage in this IPO, with a reserved portion available at face value, allowing them a lower entry point than other investors.
Potential Risks and Negatives
High Valuation
At the anticipated IPO price, the valuation seems steep relative to the company’s current revenue and earnings. This could make it challenging for investors seeking immediate returns, particularly given that growth in this sector requires patience and a long-term view.
Growth Performance
NTPC Green Energy has shown stable margins, with consistent revenue and profit growth over recent years. However, FY2024 growth lagged behind FY2023, which raises questions about the company’s ability to maintain its growth trajectory in the coming years.
Revenue Concentration Risk
Currently, 60% of NTPC Green Energy’s revenue comes from Rajasthan, exposing the company to potential regional risks. Future diversification will be critical to manage this concentration risk effectively.
Competitive Market
The renewable energy sector in India is competitive, with major players like Adani Green and Tata Power Renewables, as well as emerging entrants. NTPC Green Energy will need to differentiate itself and achieve rapid scalability to stay competitive.
Renewable Energy Limitations
Solar and wind energy generation cannot operate continuously due to dependency on sunlight and weather conditions. This can lead to lower utilization rates, especially during rainy seasons or at night, impacting consistent revenue generation.
Dependence on International Supply Chains
NTPC Green Energy, like other renewable companies, depends on imports from China for essential components, which could present a supply risk given current geopolitical uncertainties.
Conclusion
In conclusion, NTPC Green Energy’s IPO represents a significant opportunity for investors to participate in India’s transition towards renewable energy. As one of the largest public offerings of 2024, this IPO reflects NTPC’s commitment to a sustainable energy future and aligns with India’s ambitious renewable energy goals.
With its solid portfolio of solar and wind projects and plans for further expansion, NTPC Green Energy is well-positioned to drive growth in the green energy sector. As investors assess the IPO details, including allotment quotas and the financial performance of NTPC Green Energy, this offering has the potential to deliver value both to shareholders of NTPC Ltd and to new investors looking to support India’s green energy vision.
The NTPC Green Energy IPO presents a unique opportunity for investors looking to tap into India’s growing renewable energy sector. With a strong parent company, ambitious expansion goals, and the government’s push towards sustainable energy, NTPC Green Energy is well-positioned for long-term growth. However, the IPO’s high valuation, revenue concentration in Rajasthan, and stiff competition may temper short-term gains.
For existing NTPC shareholders, the discounted shareholder reservation could be an attractive way to invest. For others, this IPO is a bet on the future of renewable energy in India—one that may pay off significantly if the company delivers on its capacity targets.
As with any investment, especially in capital-intensive sectors like renewable energy, investors should carefully consider both the growth potential and risks. With the right strategy, NTPC Green Energy could be a rewarding investment for the long haul.