The initial public offering (IPO) of NTPC Green Energy was fully subscribed on the third and last day of the bidding process, thanks to the last day interest from the institutional bidders. The issue ended day one with 35 per cent bidding, while it ended day two with 93 per cent subscription.
NTPC Green Energy is selling its shares in the price band of Rs 102-108 apiece. Investors can apply for a minimum of 138 shares and its multiples thereafter. It is looking to raise Rs 10,0000 crore via IPO, which is entirely a fresh share sale of 92,59,25,926 equity shares.
According to the data, the investors made bids for 1,39,17,63,396 equity shares, or 2.35 times, compared to the 59,31,67,575 equity shares offered for the subscription by 3.30 pm on Friday, November 22. The three-day bidding for the issue, which opened on Tuesday, November 19, concludes today.
The allocation for retail was subscribed 3.24times, while the portion reserved for qualified institutional bidders (QIBs) saw a subscription of 3.30 times. Portions for employees and shareholders were booked 75 per cent and 1.48 times, respectively. However, the quota set aside for non-institutional investors (NIIs) saw bid for 77 per cent as of the time.
Incorporated in April 2022, NTPC Green Energy, promoted by NTPC under Ministry of Power, is a renewable energy company that focuses on undertaking projects through organic and inorganic routes. The company had an operational capacity of 3,071 MW from solar projects and 100 MW from wind projects across six states as of August 31, 2024,
The grey market premium of NPTC Green Energy has taken a big hit amid the rising volatility in the broader market. Last heard, the company was commanding a premium of Rs 0.40 in the unofficial market, suggesting a flat listing for the investors. However, the premium in the grey market stood around Re 1, on the first day of the bidding.
Brokerage firms have mostly had a positive view on the issue but suggest it for a long-term subscription only. They are positive on the company’s strong parentage, rising demand for renewable energy, long term agreement for the clients, positive cash flows and cash rich nature of the business. However, rich valuations and any turnaround in government policies are its major concerns.
NTPC Green Energy is a leading player in India’s renewable energy sector, with a focus on solar energy, green hydrogen, and energy storage. Backed by NTPC’s financial strength, NGEL is poised for growth with a 26,071 MW portfolio and an aggressive expansion plan, said GEPL Capital.
“NGEL’s strategic focus on high-capacity utilization, low costs, and long-term PPAs ensures stable revenue streams, positioning it as a key player in India’s energy transition and net-zero goals. Hence, we recommend an ‘subscribe’ rating to this issue for the long-term gains,” it said.
NTPC Green Energy allotted 36,66,66,666 shares to anchor investors to mop up Rs 3,960 crore at a price of Rs 108 per share. For the quarter ended on June 30, 2024, NTPC Green Energy reported a net profit of Rs 138.61 crore with a revenue of Rs 607.42 crore. The company clocked a bottomline of Rs 344.72 crore with a revenue of Rs 2,037.66 crore for the financial year 2023-24.
Investors considering largest renewable energy public sector enterprise, strong parentage (NTPC), diversified Portfolio of 16,896 MWs solar and wind projects as of September 30, 2024, experienced team and growing revenues along with strong credit ratings can subscribe to NTPC Green Energy IPO, said Eureka Shares & Stock Brokers.
The company has reserved shares worth Rs 200 crore for its eligible employees,, while eligible shareholders of NTPC have shares worth Rs 1,000 reserved for them.75 per cent for the net offer has been reserved for qualified institutional bidders, while non-institutional investors will get 15 per cent of the net offer. Retail investors will have only 10 per cent of the net offer.
At the upper price band, NGEL is valued at FY24 EV/Ebitda of 53.4 times on post issue capital. The company will increase its operational capacity to approximately 19 GW by FY27 and 60 GW by 2032 from 3.3 GW as of Sep’24. The company has exponential growth potential in medium term over FY24 to FY27 period, said Arete Securities with a ‘subscribe’ rating.
IDBI Capital, IIFL Securities, HDFC Bank and Nuvama Wealth Management are the book running lead managers of the NTPC Green Energy IPO, while Kfin Technologies is the registrar for the issue. Shares of the company shall be listed at both BSE and NSE on Wednesday, November 27.
