NTPC Green Energy IPO: The initial public offering of NTPC Green Energy Limited (NGEL), an umbrella company for state-owned power giant NTPC’s green business initiatives, is opening today on Tuesday. The price band of the much-awaited IPO has been fixed in the range of Rs 102-Rs 108.
10,000 crore IPO will close on Friday. The IPO allotment will be finalized on November 25, while its listing will take place on November 27.
NTPC Green Energy IPO GMP Today
According to market watchers, unlisted shares of NTPC Green Energy Ltd in the gray market traded at Rs. 0.70 increased to Rs. Continues to trade at 108.7. Rs. 0.70 GMP Rs. 108 is just 0.65 percent premium over the issue price. It signals a waning of interest in IPOs.
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: Quota of shareholders
Shareholders of its parent entity NTPC Ltd will have an upper edge in the much-awaited offer as they hold 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.
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.”
NTPC Green Energy IPO Shareholders’ Quota: Who is Eligible?
Under this, investors holding shares of NTPC 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.
On Monday, a day ahead of the NTPC Green Energy IPO, shares of NTPC Ltd fell 2.28 percent to Rs. was trading at 364.
NTPC Green Energy IPO: Should You Apply? Analysts’ recommendations
Most 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 augments 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.
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, equity strategy, WealthMills Securities.
“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 IPO will be open between November 19 and November 22. The allotment is scheduled to be finalized on November 25, while the listing will take place on November 27.
The proceeds from its new issues will be used for investment in its wholly-owned subsidiary, NTPC Renewable Energy Limited (NREL), for repayment/prepayment, in whole or in part of certain outstanding borrowings obtained by NREL. and 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.
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. 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).