CT Investment Desk, Nov 19 2024 : NTPC Green Energy, the renewable energy arm of NTPC Limited, has officially opened its initial public offering (IPO) aiming to raise a staggering 10,000 crore. This move marks a significant step for the company as it seeks to expand its footprint in the renewable energy sector. With a focus on sustainability and clean energy, NTPC Green Energy is poised to become a leader in India’s transition towards greener solutions.

Key Details of the IPO

IPO Overview

• Total Amount: 10,000 crore
• Issue Type: Fresh issue of 92.59 crore shares
• Price Band: 102 to 108 per share
• Minimum Investment:
  • Retail investors must apply for at least 138 shares, totaling 14,904.
  • Small Non-Institutional Investors (sNII) need to apply for a minimum of 1,932 shares (14 lots), requiring an investment of 2,08,656.
  • Big Non-Institutional Investors (bNII) must apply for at least 9,384 shares (68 lots), amounting to 10,13,472.

Important Dates

• IPO Opening Date: November 19, 2024
• IPO Closing Date: November 22, 2024
• Allotment Date: November 25, 2024
• Listing Date: November 27, 2024

Financial Performance and Future Prospects

NTPC Green Energy has shown remarkable growth in its financial performance. In the fiscal year 2023-24, the company reported a total income increase of 1,094%, reaching 2,037.66 crore compared to 170.63 crore in the previous year. The net profit also more than doubled to 344.72 crore from 171.23 crore in FY 2022-23.

Utilization of IPO Proceeds

The proceeds from this IPO will be strategically utilized for:

• Investing in NTPC Renewable Energy Limited (NREL), its wholly-owned subsidiary.
• Repaying or prepaying outstanding borrowings.
• General corporate purposes.

Market Sentiment and Subscription Trends

On the first day of bidding, the NTPC Green Energy IPO saw a robust response from investors. Within just 90 minutes of opening, retail subscriptions reached 55%, indicating strong market interest. The anchor investment round completed prior to the IPO raised 3,960 crore from institutional investors, providing a solid foundation for the offering.

Grey Market Premium (GMP)

As of now, NTPC Green Energy shares are trading at a grey market premium of approximately 0.70 per share. This reflects a potential listing gain of about 0.65% over the upper price band.

Why Invest in NTPC Green Energy?

Leadership in Renewable Sector

NTPC Green Energy is recognized as India’s largest non-hydro renewable energy public sector enterprise. The company is committed to expanding its operational capacity significantly over the coming years, with plans to reach 60 GW of renewable energy capacity by 2032.

Strategic Focus on Sustainability

The company’s portfolio includes:

• Solar projects with an operational capacity of 3,220 MW.
• Wind projects contributing an additional 100 MW across six states.

This strategic focus on renewable energy aligns with global trends towards sustainable practices and positions NTPC Green Energy as a key player in this evolving market.

Expert Recommendations

Brokerage firms have broadly recommended subscribing to the NTPC Green Energy IPO for long-term investment. Analysts highlight that while the valuation may appear aggressive with a P/E ratio of 264x, the company’s strong fundamentals and ambitious growth plans justify this outlook.

The NTPC Green Energy IPO represents a significant opportunity for investors looking to engage with India’s burgeoning renewable energy sector. With strong financial backing and an ambitious growth trajectory, NTPC Green Energy is set to make waves in the market upon its listing on November 27.