NTPC Green Energy IPO receives 0.36 times overall subscription on first day of bidding and retail portion oversubscribed.
NTPC Green Energy IPO GMP: The initial public offer of state-owned NTPC Ltd’s renewable energy arm NTPC Green Energy Ltd (NGEL) opened on November 19 and fetched an overall subscription of 0.36 times on the first day of bidding, with the retail portion being oversubscribed. However, its gray market premium (GMP), which reflects investors’ willingness to pay more than the IPO issue price, remains disappointingly low at 0.74 percent.
NTPC Green Energy IPO GMP Today
According to market watchers, unlisted shares of NTPC Green Energy Ltd traded in the gray market on Wednesday at Rs. 108.8 which was trading at Rs. 108 per share from the issue price to just Rs. 0.80 or 0.74 percent were up. Rs. 0.80 GMP indicates subdued investor sentiment for IPOs and indicates muted listing performance.
Its GMP has come down drastically in the last 20 days.
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.
NTPC Green Energy IPO: Latest Subscription Status
The NTPC Green Energy IPO, which will close on November 22, was 36 percent subscribed on the first day of the IPO on Tuesday, November 19. It received bids for 20,19,81,492 shares against 56,01,58,217 shares. Offer
The retail investors category received 1.47 times subscription, while the non-institutional investors (NII) segment received 17 per cent subscription.
A day before the IPO, NTPC Green Energy raised Rs. 3,960 crore was collected.
NTPC Green Energy IPO: Analysts Recommendations
Most of the brokerages have given ‘Subscribe for Long Term’ recommendations for the IPO.
“NGEL has a large portfolio of utility-scale solar and wind energy projects along with projects from PSUs and Indian corporates,” SBI Securities said in its IPO note. Along with the NTPC Group, the company has a strong track record of developing, constructing and operating renewable power projects managed by experienced in-house management and procurement teams.”
At an upper price band of Rs 108, NGEL is valued at FY24 EV/EBITDA of 53.4x post issue capital. The company will increase its operational capacity from 3.3 GW by September 2024 to 6/11/19 GW by FY25E/FY26E/FY27E respectively. Based on our envelope calculations, at the upper price band, the issue is valued at FY25E/FY26E /FY27E EV/EBITDA multiples of 35.3x/18.3x/10.1x and EV/MW at Rs. 16.8 cr/9.0 cr/5.1 cr. In the FY24-27E period the company grew its revenue/EBITDA/PAT at a CAGR of 79.0%/117.2%/123.8% respectively to Rs. 11,250 cr/9,563 cr/1,980 cr expected to grow exponentially in the medium term.
“We recommend investors to subscribe at cut-off price for long term,” SBI Securities said in a note.
Another brokerage firm Reliance Securities also gave ‘Subscribe for Long Term’ rating to the IPO.
It said NGEL benefits from NTPC’s financial strength and long-term relationships with off-takers and suppliers, along with a strong credit rating that boosts its revenues enabling low cost of debt to execute large-scale projects. NGEL has a management team with deep domain expertise focused on new energy solutions like green hydrogen, green chemicals and storage with prudent growth and contributing to India’s net zero goals.
“We believe with a sound business model and strong earnings growth coupled with improved financial and return ratios, we recommend subscribing to the issue for the long term,” Reliance Securities said.
NTPC Green Energy IPO: More Details
Rs. 10,000 crore IPO is a purely fresh equity issue with no offer for sale (OFS) component. per share Rs. 102 and Rs. The public issue priced between 108 will be open for subscription from November 19 to November 22.
The company used the proceeds to repay or prepay the loan of its subsidiary, NTPC Renewable Energy Limited (NREL). 7,500 crore is planned to be allocated, the remaining funds are earmarked for general corporate purposes.
NTPC Green Energy, a ‘Maharatna’ central public sector enterprise, has a renewable energy portfolio that includes solar and wind power assets.
The IPO is managed by IDBI Capital Markets & Securities, HDFC Bank, IIFL Capital Services (formerly IIFL Securities), and Nuwama Wealth Management as book-running lead managers.