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NTPC Green Energy eyes growth with Rs 10,000-crore IPO, subscriptions soar

The IPO of NTPC Green Energy opened for public bid on November 19, 2024, and saw good traction on the second day of bidding. By 11:13 am on November 21, the Rs 10,000 crore IPO had attracted 50 % overall subscription and had 28,07,34,090 bids against the 56,01,58,217 shares to be sold.

The retail portion saw 2x subscriptions, while the non-institutional investors (NII) category achieved 0.26x subscriptions. The IPO marks a fully fresh equity issuance with no Offer-for-Sale (OFS) component and is priced between Rs 102 and Rs 108 per share.

Muted Grey Market Sentiment

The IPO’s Grey Market Premium (GMP) remains subdued at 0.74% which is suggestive of conservative sentiments. Unlisted shares of NTPC Green Energy Ltd were trading at Rs 108.8 per piece on  November 21, just 0.80% above the issue price. Observers noted that the GMP has declined sharply over the past 20 days, signalling a muted listing performance. The IPO aims to list on the stock exchange by 27th November 2024. Meanwhile, before opening the public issue, NTPC Green Energy had garnered Rs 3,960 crore from anchor investors.

Analysts Recommend Long-Term Subscription

Both SBI Securities and Reliance Securities have advised to invest in the IPO for the long run. “NGEL has a large portfolio of utility-scale solar and wind energy projects coupled with projects for PSUs and Indian corporates. The company along with the NTPC Group have a strong track record of developing, constructing and operating renewable power projects, driven by experienced in-house management and procurement teams,” said SBI Securities, in an IPO note.

According to a News18 article, Reliance Securities pointed to a balance sheet of NTPC Green Energy and said: “We, therefore, endorse a Subscribe to the issue for the long term basis a sound business model and reflecting the improved financials and return ratios.”

IPO Details and Future Plans

Out of Rs 15,000 crore raised through IPO, Rs 7,500 crore will be utilized for repaying or prepaid loans of NTPC Renewable Energy Ltd (NREL). The balance shall cater for other general corporation needs. NTPC Green Energy Ltd (NGEL) the Maharatna PSU laboratory in renewable power has the asset in solar and wind energy. The company has set the target to increase its operational capacity to 6, 11, and 19 GW by FY 25/FY 26/FY 27 from the present 3.3 GW by September 2024.

The IPO is offered by IDBI Capital Markets & Securities Limited, HDFC Bank Limited, IIFL Capital Services Limited, and Nuvama Wealth Management Services Limited as the leading managers.