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The NTPC Green Energy IPO may be opened for bidding on Monday, November 18.
The NTPC Green Energy IPO is entirely a fresh issuance of equity shares with no offer-for-sale component. (File Photo: Reuters)
NTPC Green Energy, a subsidiary of electricity generator NTPC Ltd, is likely to file its red herring prospectus (RHP) on Tuesday, November 12, according to people in the know of the matter. NTPC’s shareholders have a quota in the public offer and those who held the shares till the filing of the RHP are expected to be eligible for the quota.
NTPC’s shares have been falling for the past few days amid weakened overall market sentiments. The shares have declined over 3.5 per cent in the past week to Rs 385.8 apiece on Tuesday.
Importantly, GMP of NTPC Green Energy have also fallen since last week, slipping to Rs 9 on November 12 from Rs 25 as on November 9.
The company recently received final approval of markets regulatory Sebi for its Rs 10,000-crore initial public offering. It had filed the draft IPO papers on September 18, 2024.
Apart from shareholders quota, the IPO includes a reservation in subscription for eligible employees and a discount is being offered to eligible employees bidding in the employee reservation portion.
NTPC Green Energy IPO: Opening Date
Though the official date has not been announced yet, the IPO is expected to be launched this month. According to media reports, the IPO may be opened for bidding on Monday, November 18.
The price of the IPO will also be announced in the upcoming days.
The NTPC Green Energy IPO will also have a shareholders quota. So, those who have shares of NTPC as of the date of RHP, which will be filed later, can participate in the shareholders category in the IPO.
NTPC Green Energy IPO: What Should Investors Do To Raise IPO Allotment Chance
As the NTPC Green Energy IPO will also have a shareholders quota, investors can buy one NTPC shares now to be eligible for the shareholders category. It will raise their chances of IPO allotment. Those who have shares of NTPC as of the date of RHP, which will be filed later, can participate in the shareholders category in the IPO.
NTPC Green Energy IPO: What Analysts’ Say
ICICI Securities has given a ‘buy’ rating to the shares of NTPC. It said NTPC Green Energy Limited (NGEL), a 100 per cent subsidiary of NTPC, is looking to debut on exchanges as the company files its DRHP.
“We analyse NGEL’s business, look at its valuation metrics and evaluate key concerns. The company has an operational capacity of 3.2GW, 12GW of contracted under-construction renewable energy (RE) projects and future development pipeline at 11GW. NGEL is not only looking to set up utility-scale RE projects, but also tie up with corporates and PSUs for their captive RE requirements. We expect the return ratios for captive to be higher than utility-scale projects,” ICICI Securities said in a note.
NTPC targets 60 gigawatts (GW) of renewable energy (RE) capacity by FY32.
“We estimate revenue of Rs 117 billion (Rs 11,700 crore), EBITDA of Rs 95-100 billion (Rs 9,500-10,000 crore) for its portfolio. EV to EBITDA remains the best valuation metric to analyse NGEL’s RE portfolio. Retain BUY and TP of Rs 495 on NTPC,” ICICI Securities stated.
“The IPO comes at a time when thermal power-heavy NTPC is looking for other energy avenues to diversify into and bolster revenues,” Kranthi Bathini, director of equity strategy at WealthMills Securities said, according to Reuters.
“Considering the fact that green energy will remain in focus in the near future, investors would definitely want a slice of this pie,” Bathini added.
NTPC Green Energy IPO: More Details
The proceeds from the fresh issue to the extent of Rs 7,500 crore will be used for investment in its wholly owned Subsidiary, NTPC Renewable Energy Limited (NREL) for repayment/ prepayment, in full or in part of certain outstanding borrowings availed by NREL; and general corporate purposes.
Promoted by NTPC Ltd, NTPC Green Energy is the largest renewable energy public sector enterprise (excluding hydro) in terms of operating capacity as of June 30, 2024 and power generation in Fiscal 2024, according to a CRISIL Report mentioned in the DRHP.
As of June 30, 2024, NTPC Green’s “Portfolio” consisted of 14,696 MWs including 2,925 MWs of operating projects and 11,771 MWs of contracted and awarded projects. Additionally, it has 10,975 MWs of “Capacity under Pipeline”, aggregating to 25,671 MWs together with its Portfolio.
The Company’s renewable energy portfolio encompasses both solar and wind power assets with presence across multiple locations in more than six states which helps mitigate the risk of location-specific generation variability, according to a CRISIL Report mentioned in the DRHP.
As of June 30, 2024, NTPC Green had 15 offtakers across 37 solar projects and 9 wind projects and are in the process of constructing 31 renewable energy projects in 7 states consisting of 11,771 MWs Contracted and Awarded. It also had 2,925 MWs operating across 14 solar projects and 2 wind projects.
Its operational capacity was 3,071 MW of solar projects and 100 MW of wind projects across six (6) states as of August 31, 2024, strategically focused on developing a portfolio of utility-scale renewable energy projects, as well as projects for public sector undertakings (“PSUs”) and Indian corporates.
NTPC Green Energy’s revenue from operations has grown at a CAGR of 46.82% from ₹910.42 crore in Fiscal 2022 (on a special purpose carved-out basis) to ₹1,962.60 crore in Fiscal 2024 (on a restated basis). Profit after tax grew at a CAGR of 90.75% from ₹94.74 crore in Fiscal 2022 (on a special purpose carved-out basis) to ₹344.72 crore in Fiscal 2024 (on a restated basis).
For the three months period ended June 30, 2024 revenue from operations and profit after tax stood at Rs 578.44 crore and Rs 138.61 crore, respectively, on a restated basis.
IDBI Capital Markets & Securities Limited, HDFC Bank Limited, IIFL Securities Limited, and Nuvama Wealth Management Limited are the book-running lead managers to the issue and KFin Technologies Limited is the registrar to the offer.
