The NTPC Green Energy IPO is set to open on November 19, 2024, marking an important step in India’s renewable energy journey. As a wholly owned subsidiary of NTPC, this IPO aims to raise Rs.10,000 crore, with anchor investor bids scheduled for November 18 and public bids closing on November 22. Shares are expected to list on BSE and NSE on November 27.
Here’s a breakdown of everything you need to know about the IPO, expert opinions, and whether it’s a good investment option.
IPO Price Band and Lot Size
- Price Band: Rs.102–Rs.108 per share
- Lot Size: 138 shares per lot
- Fresh Issue: 92.59 crore new shares
- No Offer for Sale (OFS): The entire issue involves fresh shares.
The IPO proceeds will primarily be used to reduce the debt of its subsidiary, NTPC Renewable Energy, by Rs.7,500 crore, while the remaining amount will support general corporate needs.
NTPC Green Energy: Business and Financial Snapshot
Company Overview
NTPC Green Energy focuses on developing utility-scale renewable energy projects. It is India’s largest renewable energy public sector unit (excluding hydropower) based on operational capacity and power generation.
Key Stats:
- Operational Capacity (Sept 2024): 3.3 GW
- Under Construction Projects: 12 GW
- Future Pipeline: 11 GW
- Target (FY2032): 60 GW renewable energy capacity
Financial Performance (FY2024):
- Revenue: Rs.2,037.66 crore (up 1,094% YoY)
- Net Profit: Rs.344.72 crore (up 101% YoY)
- Q1 FY2025: Rs.607.42 crore revenue, Rs.138.61 crore net profit
With such robust growth figures, NTPC Green Energy is set to play a pivotal role in India’s net-zero emissions goal.
Expert Opinions: Should You Subscribe?
SBI Securities
The brokerage recommends subscribing to the IPO for long-term investment at the upper price band of Rs.108. They project that NTPC Green Energy’s operational capacity will grow significantly:
- FY2025: 6 GW
- FY2026: 11 GW
- FY2027: 19 GW
SBI expects the company’s revenue, EBITDA, and profit to grow at 79%, 117.2%, and 123.8% CAGR, respectively, over FY2024–2027.
Reliance Securities
Reliance Securities also advises subscribing to the IPO, highlighting NTPC Green Energy’s:
- Strong financial backing from NTPC
- Robust business model focusing on new energy solutions like green hydrogen and green chemicals
- High growth potential in India’s renewable energy market
They emphasize the company’s ability to deliver high returns due to its strategic focus and prudent project execution.
ICICI Securities
ICICI Securities notes that NTPC Green Energy is diversifying into captive renewable energy (RE) projects, which typically offer higher return ratios compared to utility-scale projects. They believe the company’s long-term growth prospects are promising, given its strong development pipeline and renewable energy targets.
What About the Grey Market?
Ahead of its IPO launch, NTPC Green Energy shares are trading at a Rs.1 premium in the grey market, suggesting limited speculative interest. However, the long-term growth potential makes this IPO attractive for serious investors.
Investment Prospects: Who Should Consider It?
- Long-Term Investors: If you are looking for stable growth in the renewable energy sector, this IPO offers a promising opportunity.
- Growth-Focused Investors: With a projected 60 GW capacity by 2032, NTPC Green Energy is poised for substantial expansion.
- Sustainability Enthusiasts: Investors aligned with green energy initiatives and India’s net-zero goals will find this IPO appealing.
Invest wisely by evaluating your financial goals and risk tolerance before participating in this renewable energy IPO.
