The NTPC Green Energy IPO will launch on November 19 and close on November 22.
With the NTPC Green Energy IPO set to open for public subscription on Tuesday, shareholders of its parent entity NTPC Ltd will have an upper edge in the much-awaited offer with a 10 per cent quota. According to the Red Herring Prospectus (RHP), Rs. 10,000-crore IPO from Rs. 1,000 crore will be reserved for shareholders of NTPC and any investor holding a single share of NTPC will be eligible to apply under the shareholder quota, thus increasing the chances of this. IPO Allotment.
The IPO will be launched on November 19 and close on November 22, according to the RHP filed by NTPC Green Energy Ltd (NGEL), an umbrella company for state-owned power giant NTPC’s green business initiatives.
NTPC Green Energy IPO Shareholder Quota: Cutoff Date
According to the RHP, “Equity shares of face value of Rs 10 each will be allotted to eligible shareholders on a proportionate basis, this reserve not exceeding 10 per cent of the total issue size.”
Under this, investors holding NTPC shares in their demat accounts on 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 closed at ₹372.8 on BSE on Thursday, down 2.19 percent from the previous close.
NTPC Green Energy IPO: Can You Buy NTPC Shares Now for Shareholder Quota?
No, the cutoff date was 13 November. Therefore, buying shares of NTPC now will not make any investor eligible under the shareholder quota of NTPC Green Energy IPO.
According to a market watcher, “If you know anyone who currently holds NTPC shares, you can ask them to apply for the IPO on your behalf. This is the only way out now for those who don’t have shares.”
Indian stock markets are closed for three days on Friday (Guru Nanak Jayanthi), Saturday and Sunday. Therefore, Monday is the only trading day left before the IPO opens on Tuesday.
NTPC Green Energy IPO: Why so much investor interest?
After the recent bumper listing of two green energy companies – Premier Energy and Wari Energies, investors are now looking for another opportunity to invest in a green energy company’s IPO, especially when it is a subsidiary of a state-owned power giant in India. However, shares of Premier Energy and Wari Energy have faced significant selling pressure in the past few days.
Similarly, the Gray market premium NTPC Green Energy IPO shows modest listing benefits for investors. In fact, its GMP has been falling for the past seven days and has fallen from Rs 25 (or 23.14 per cent) on November 9 to just Rs 2 (or 1.85 per cent) on Friday, November 15.
GMP is dependent on market sentiments and is subject to change. The ‘grey market premium’ represents the willingness of investors 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 analyze NGEL’s business, look at its valuation metrics and assess key concerns. The company has an operational capacity of 3.2GW, 12GW of contracted-construction renewable energy (RE) projects and a future development pipeline of 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 needs. We expect return ratios for captives to be higher than utility-scale projects,” ICICI Securities said in a note last month.
NTPC is targeting 60 gigawatt (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 and grow revenue,” said Kranti Bathini, director of equity strategy at WealthMills Securities, according to Reuters.
Considering the fact that green energy will be in focus in the near future, investors will definitely want a piece of this pie, Bathini added.
NTPC Green Energy IPO: More Details
The IPO is fully priced at Rs. 10,000 crore is a fresh issue with no offer for sale component. Employees eligible to bid in the employee reservation portion will receive Rs. A discount of 5 is offered.
The proceeds from its new issues will be used for repayment/prepayment of investments in its wholly owned subsidiary, NTPC Renewable Energy Limited (NREL), in whole or in part of certain outstanding borrowings obtained by NREL. General corporate purposes.
According to the November 2024 CRISIL report, NTPC Green Energy is the largest renewable energy public sector enterprise in terms of operating capacity as of September 30, 2024 and power generation (excluding hydro) in fiscal 2024.
Its renewable energy portfolio includes both solar and wind power assets with a presence at multiple locations in more than six states that help mitigate the risk of location-specific generation variability. It has an operational capacity of 3,220 MW solar projects and 100 MW wind projects in six (6) states as of September 30, 2024.
As of September 30, 2024, its portfolio comprises 16,896 MW including 3,320 MW of operating projects and 13,576 MW of contracted and awarded projects. Its capacity under pipeline together with its portfolio stands at 26,071 MW. It had 17 offtakers in 41 solar projects and 11 wind projects.
NTPC Green Energy’s revenue from operations to grow at a CAGR of 46.82 percent to reach Rs. 910.42 crore (on special purpose basis) in FY 2024 to Rs. 1,962.60 crores (on restated basis).
Its operating EBITDA in FY2022 is expected to be Rs. 794.89 crore (on a special purpose basis) growing at a CAGR of 48.23 percent in FY 2024 (on restated basis) to Rs. 1,746.47 crores. Its profit after tax in FY2022 will be Rs. 94.74 crore (on a special purpose basis) growing at a CAGR of 90.75 percent in FY2024 to Rs. 344.72 crores (on restated basis).