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NTPC Green Energy IPO opens tomorrow to raise ₹10,000 crore with a ₹102-₹108 price band and green energy focus

NTPC Green Energy IPO: A subsidiary of NTPC will issue its 'NTPC Green Energy IPO', which would open for subscription on November 19, 2024, and end on November 22, 2024. The public offer is likely to collect up to ₹10,000 crore from the sale of fresh equity shares.

The price band for this issue has been fixed between ₹102 and ₹108 per equity share. The 'IPO' will issue 92.59 crore shares and once subscribed, investors will be able to purchase one of India's biggest renewable energy companies.

NTPC Green Energy Ltd is the subsidiary of NTPC Ltd for fast-tracking solar and wind power projects. As of September 2024, the company had an operational capacity of 3,220 MW with renewable energy capacity targeted at 60 GW by 2032. The principal usage of the IPO proceeds would be in investing in the subsidiary, NTPC Renewable Energy Ltd, also called NREL, and for general corporate purposes.

NTPC Green Energy IPO has set a minimum lot size of 138 shares and demands a minimum investment amount of ₹14,904. The share allocation for the offering is divided into three types: QIBs get 75% of the share, 15% go to non-institutional investors, and 10% to retail investors.

While the grey market premium (GMP) is currently at ₹1, indicating a marginal premium of 0.9%, stock market observers are cautiously optimistic about the offering. Such a modest premium reflects confidence by investors but is indicative of a wait-and-see approach as the company begins to trade publicly.

Revenue has also shot through the roof. From ₹910 crore in FY22, NTPC Green Energy Ltd has gained revenue to ₹1,963 crore in FY24. This would be supported through a strategic investment by the company in solar and wind power as it forms a part of India's long-term renewable energy goals and targets net-zero emissions.

That is why the stock market investors are interested in the NTPC Green Energy IPO linked to the proven well-established brand name, NTPC. The IPO is an attractive long-term investment as the company's financial health is quite robust with immense growth potential in the renewable energy sector.

The shares will be allotted on 25 November 2024, and the shares will be listed on both BSE and NSE on 27 November 2024.