NTPC Green Energy IPO: Opening date, size, price, everything you need to know

Last updated:Nov 3, 2024 11:40 IST

NTPC Green Energy Limited, a wholly owned subsidiary of NTPC Limited, has already received final approval from market regulator Sebi for its IPO worth Rs 10,000 crore.

The IPO of NTPC Green Energy is entirely a new issue of shares without part of an offer for sale. (File photo: Reuters)

Even as NTPC Green Energy Limited, a wholly owned subsidiary of NTPC Limited, has received final approval from market regulator Sebi, the Rs 10,000 crore IPO is expected to hit the primary market soon. The IPO with a face value of Rs 10 per equity share will be entirely a fresh issue of shares.

The company had filed its IPO papers with Sebi on September 18, 2024.

The IPO also includes reservation for a subscription by eligible employees and a discount is offered to eligible employees who bid in the employee reservation section.

NTPC Green Energy IPO: Opening Date

Although the official date has not yet been announced, the IPO is expected to take place this month.

The price of the IPO will also be announced in the coming days.

The IPO of NTPC Green Energy will also have a shareholder quota. Thus, those who hold shares of NTPC as on the date of RHP, which will be filed later, can participate in the shareholder category in the IPO.

NTPC Green Energy IPO: What should investors do to increase the chances of IPO allotment

Since the IPO of NTPC Green Energy will also have a shareholder quota, investors can now purchase one NTPC share to qualify for the shareholder category. It will increase their chances of getting an IPO allotment. Those who hold shares of NTPC as of the date of RHP, which will be filed later, can participate in the shareholder category in the IPO.

NTPC Green Energy IPO: What Analysts Say

ICICI Securities has given a ‘buy’ rating to NTPC stock. It said NTPC Green Energy Limited (NGEL), a 100 percent subsidiary of NTPC, is looking to debut on the stock exchange as the company files its DRHP.

“We analyze NGEL’s business, look at its valuation metrics and evaluate key concerns. The company has an operating capacity of 3.2 GW, 12 GW of contracted renewable energy (RE) projects under construction and a future development pipeline of 11 GW. NGEL not only wants to build utility-scale renewable energy projects, but also partner with companies and PSUs for their own renewable energy needs. We expect return ratios for captives to be higher than for utility-scale projects,” ICICI Securities said in a note.

NTPC targets 60 gigawatts (GW) of renewable energy (RE) capacity by FY32.

“We estimate revenue of Rs 117 billion (Rs 11,700 crore), EBITDA of Rs 95-100 billion (Rs 9,500-10,000 crore) for its portfolio. EV to EBITDA remains the best valuation metric to analyze NGEL’s real estate portfolio. Maintain BUY and TP of Rs 495 on NTPC,” ICICI Securities said.

“The IPO comes at a time when thermal-heavy NTPC is looking for other energy sources to diversify and boost revenues,” said Kranthi Bathini, director of equity strategy at WealthMills Securities, according to Reuters.

“Given that green energy will continue to take center stage for the foreseeable future, investors would definitely want a piece of this pie,” Bathini added.

NTPC Green Energy IPO: More Details

The proceeds of the fresh issue of Rs 7,500 crore will be used for investments in its wholly owned subsidiary, NTPC Renewable Energy Limited (NREL), for repayment/prepayment, in whole or in part, of certain outstanding loans held by NREL; and general business purposes.

NTPC Green Energy, promoted by NTPC Ltd, is the largest public sector undertaking in renewable energy (excluding hydropower) in terms of operating capacity as of June 30, 2024 and power generation in FY 2024, according to a CRISIL report mentioned in the DRHP.

As of June 30, 2024, NTPC Green’s “Portfolio” consisted of 14,696 MW, including 2,925 MW of operational projects and 11,771 MW of contracted and awarded projects. In addition, it has 10,975 MW of “Capacity under Pipeline”, which amounts to 25,671 MW together with its portfolio.

The company’s renewable energy portfolio includes both solar and wind assets with multi-site presence in more than six states, which helps mitigate the risk of location-specific generation variability, according to a CRISIL report mentioned in the DRHP.

As of June 30, 2024, NTPC Green had 15 off-takers across 37 solar projects and 9 wind projects and is in the process of constructing 31 renewable energy projects in 7 states, comprising 11,771 MWs, contracted and awarded. It also had 2,925 MW active in 14 solar projects and 2 wind projects.

Operating capacity as of August 31, 2024 was 3,071 MW of solar projects and 100 MW of wind projects in six (6) states, strategically focused on developing a portfolio of utility-scale renewable energy projects, as well as projects for public sector companies. (“PSUs”) and Indian companies.

NTPC Green Energy’s operating revenues grew at a CAGR of 46.82% from ₹ 910.42 crore in fiscal 2022 (on a special purpose disaggregated basis) to ₹ 1,962.60 crore in fiscal 2024 (on restated base). Profit after tax grew at a CAGR of 90.75% from ₹94.74 crore in FY2022 (on a special purpose disaggregated basis) to ₹344.72 crore in FY2024 (on a restated basis).

For the three-month period ended June 30, 2024, revenue from operations and profit after tax stood at Rs 578.44 crore and Rs 138.61 crore, respectively, on an adjusted basis.

IDBI Capital Markets & Securities Limited, HDFC Bank Limited, IIFL Securities Limited and Nuvama Wealth Management Limited are the book-running lead managers of the issue and KFin Technologies Limited is the registrar of the offer.