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Mahagenco JV and Record Growth drive NTPC’s Green IPO success, lists at ₹111.50

India’s largest power producer NTPC Green Energy made a kickstart debut on November 27 after listing at Rs 111.50, a 3.24% higher than its issue price of Rs 108. NTPC Green Energy, a solar power magnus in India successfully positioned itself in the renewable energy sector owing to its backing from the parent organization, NTPC.

NTPC is India’s biggest power generator with a total portfolio of 16,896 MW comprising solar & wind projects. The IPO, which attracted 2.4 times subscriptions indicates that investors are increasingly interested in clean energy. It began trading at ₹111.50 on the key NSE and ₹111.60 on the BSE after the issue price of ₹108.

IPO Overview and Allotment

The IPO, which was open for subscription from November 19 to 22, was 2.4 times more subscribed led by institutional and retail investors. Meanwhile, the non-institutional interest was subdued due to fluctuating markets, high volatility and high valuation. Shares were issued on November 25 on a lottery basis and were regulated by the registrar for transparency.

Market Forecast & Analyst Views

Considering the factors including subscription demand and current market trends, the expectation is that the stock will list in the zone of 0-5% over the issue price. Investors who got allocated shares should not expect high listing prices because of the current market situation. Talking about the IPO and Renewable energy sector, Gaurav Garg of Lemonn Markets said, “We anticipate the stock to list at a premium but expect a decline in subsequent days due to its high valuation. While the renewables sector is performing well and IPOs in this space have seen exceptional listings, this trend may create a "fear of missing out" (FOMO) effect among investors applying for NTPC Green.”

Strengths and Risks

NTPC Green Energy, a subsidiary of NTPC, is the largest renewable energy PSU in India by capacity. Its portfolio of renewable energy includes: Solar-3,220 MWs and Wind- 100 MWs in six states. The operation revenues and profits both successively incremented in the fiscal years FY22 to FY24, at a 46.82% compound average annual growth rate and 90.75% respectively, in comparable value terms.

Moreover, over 87+% of the total revenues for FY24 came from five customers where one contributing 50% of the revenues. This means the company could be poorly affected financially in the case of losing some of such big customers or failure in the execution of these big projects.

Grey Market Performance and Use of Proceeds

The shares traded at ₹ 1 premium in the grey market before listing, which indicated a flat debut. The IPO comprises ₹10,000 crore to be utilised to fund NTPC Renewable Energy, to repay debts of outstanding borrowings, and for corporate purposes.

The listing of NTPC Green shows that investors are increasingly warming up to renewable energy projects. This IPO also saw a moderate increase as market specialists recommend greater attention to long-term opportunities as sectors evolve and competition increases.