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NTPC Green Energy IPO: According to the RHP, 10% of the Rs 10,000-crore IPO will be reserved for NTPC’s shareholders, thus increasing their chances of the IPO allotment.
The NTPC Green Energy IPO will be launched on November 19 and concluded on November 22.
NTPC Green Energy IPO Shareholder Quota: As the NTPC Green Energy IPO is set to be opened for public subscription on Tuesday, shareholders of its parent entity NTPC Ltd will have an upper edge in the much-awaited offering as they have 10 per cent quota. According to the red herring prospectus (RHP), Rs 1,000 crore of the Rs 10,000-crore IPO will be reserved for NTPC’s shareholders and any investor holding even one share of NTPC will be eligible to apply under the shareholder quota, thus increasing chances of the IPO allotment.
The IPO will be launched on November 19 and concluded on November 22, according to the RHP filed by NTPC Green Energy Ltd (NGEL), an umbrella company for the green business initiatives of state-owned power giant NTPC.
NTPC Green Energy IPO: Shareholder Quota Cutoff Date
According to the RHP, “equity shares with a face value of Rs 10 each will be allocated to eligible shareholders on a proportionate basis, with this reserved portion not exceeding 10 per cent of the total issue size.”
Under this, investors holding NTPC’s shares in their demat account as of the RHP filing date — November 13 — will be able to apply for the NTPC Green Energy IPO under the 10% shareholder quota.
Shares of NTPC Ltd on Thursday closed at Rs 372.8 apiece on the BSE, which was lower by 2.19 per cent as compared to the previous close.
NTPC Green Energy IPO: Can You Buy NTPC Shares Now for Shareholder Quota?
No, the cutoff date was November 13. So, purchasing NTPC’s shares now will not make any investor eligible under the shareholder quota of the NTPC Green Energy IPO.
According to a market observer, “If you know anybody who currently holds NTPC’s shares, you can ask them to apply for the IPO on your behalf. That’s the only way now for those not holding the shares.”
The Indian stock markets are closed for three days — Friday (Guru Nanak Jayanti), Saturday and Sunday. So, on Monday is the only trading day left before the IPO’s opening on Tuesday.
NTPC Green Energy IPO: Why Are Investors So Much Interested?
After the recent bumper listings of two green energy companies — Premiere Energies and Waaree Energies, investors are now finding another opportunity to invest in a green energy company’s IPO, especially when it’s a subsidiary of a state-owned power giant in India. However, the shares of Premiere Energies and Waaree Energies have faced significant sell-off pressure in the past few days.
Similarly, the grey market premium of the NTPC Green Energy IPO is showing moderate listing gains for investors. In fact, its GMP has been falling for the past seven days and has reduced from Rs 25 (or 23.14 per cent) on November 9 to just Rs 2 (or 1.85 per cent) on Friday, November 15.
The GMP is based on market sentiments and keeps changing. ‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
The price band of the IPO has been fixed in the range of Rs 102-108 per share.
NTPC Green Energy IPO: Should You Apply? Analysts’ Recommendations
“We analyse NGEL’s business, look at its valuation metrics and evaluate key concerns. The company has an operational capacity of 3.2GW, 12GW of contracted under-construction renewable energy (RE) projects and future development pipeline at 11GW. NGEL is not only looking to set up utility-scale RE projects, but also tie up with corporates and PSUs for their captive RE requirements. We expect the return ratios for captive to be higher than utility-scale projects,” ICICI Securities said in a note last month.
NTPC targets 60 gigawatts (GW) of renewable energy (RE) capacity by FY32.
“The IPO comes at a time when thermal power-heavy NTPC is looking for other energy avenues to diversify into and bolster revenues,” Kranthi Bathini, director of equity strategy at WealthMills Securities said, according to Reuters.
Considering the fact that green energy will remain in focus in the near future, investors would definitely want a slice of this pie, Bathini added.
NTPC Green Energy IPO: More Details
The IPO is entirely a fresh issue of up to Rs 10,000 crore with no offer for sale component. A discount of Rs 5 per equity share is being offered to eligible employees bidding in the employee reservation portion.
The proceeds from its fresh issuance will be utilised to the extent of Rs 7 500 crore for investment in its wholly owned Subsidiary, NTPC Renewable Energy Limited (NREL) for repayment/ prepayment, in full or in part of certain outstanding borrowings availed by NREL and general corporate purposes.
NTPC Green Energy is the largest renewable energy public sector enterprise (excluding hydro) in terms of operating capacity as of September 30, 2024 and power generation in Fiscal 2024, according to a CRISIL Report, November 2024.
Its renewable energy portfolio encompasses both solar and wind power assets with presence across multiple locations in more than six states which helps mitigate the risk of location-specific generation variability. Its operational capacity was 3,220 MW of solar projects and 100 MW of wind projects across six (6) states as of September 30, 2024.
As of September 30, 2024, its portfolio consisted of 16,896 MWs including 3,320 MWs of operating projects and 13,576 MWs of contracted and awarded projects. Its Capacity under Pipeline together with its Portfolio consisted of 26,071 MWs. It had 17 offtakers across 41 solar projects and 11 wind projects.
NTPC Green Energy’s revenue from operations has grown at a CAGR of 46.82 per cent from Rs 910.42 crore in Fiscal 2022 (on a special purpose carved-out basis) to Rs 1,962.60 crore in Fiscal 2024 (on a restated basis).
Its Operating EBITDA has grown at a CAGR of 48.23 per cent from Rs 794.89 crore in Fiscal 2022 (on a special purpose carved-out basis) to Rs 1,746.47 crore in Fiscal 2024 (on a restated basis). Its profit after tax has grown at a CAGR of 90.75 per cent from Rs 94.74 crore in fiscal 2022 (on a special purpose carved-out basis) to Rs 344.72 crore in fiscal 2024 (on a restated basis).
