NTPC Green Energy IPO Subscription Status: Despite recent IPO weariness, the NTPC Green Energy IPO appears to have captured the attention of retail investors, as the segment was fully booked within a few hours of its launch. The NTPC Green Energy IPO appears to be on track to be completed by the conclusion of the last bidding day, Friday, November 22.
On Tuesday, November 19, NTPC Green Energy, NTPC's sustainable energy unit, made an initial public offering for public subscription. Before the IPO, NTPC Green Energy had raised ₹3,960 crore from anchor investors.
After day two of bidding, the public issue had been subscribed 0.93 times, the retail portion of the public issue had been booked 2.38 times, the NII segment had been subscribed 0.34 times, and the QIB segment had been booked 0.75 times.
NTPC Green Energy IPO, owned by the Government of India (GoI), saw a 33% subscription rate on its initial day. Retail investors oversubscribed the offering by 1.33 times. On the first day, the Non-Institutional Investors (NII) subscribed to 16% of the offered shares, whereas there were no bids from qualified institutional buyers (QIBs). 17% of the employee portion was reserved, and 57% of the shareholder segment was filled.
NTPC Green Energy, a subsidiary of NTPC Ltd, holds the title of the leading public sector company in renewable energy (excluding hydro) for Fiscal 2024 based on operational capacity and power generation.
According to the RHP, Adani Green Energy Ltd and ReNew Energy Global PLC are the company's comparable listed peers, with P/Es of 259.83 and 47.05, respectively.
The brokerage's report indicated that NTPC Group plans to increase its non-fossil fuel capacity to 60 GW by 2032. This expansion would lead to the company's valuation being assessed at EV/MW ratios of 15.6x, 8.5x, and 4.9x for FY25E, FY26E, and FY27E, respectively. The robust execution capabilities supported by a strong parent company, favorable industry growth trends, and involvement in Battery Energy Storage Systems (BESS) bode well for future growth. However, the IPO's pricing is considered high in comparison to its listed competitors, which are trading at an EV/EBITDA range of 38-40x. Consequently, the brokerage has given the IPO a "Subscribe for Long-Term" recommendation.
The brokerage noted that, based on their calculations, the upper price band for the issue equates to FY25E/FY26E/FY27E EV/EBITDA multiples of 35.3x/18.3x/10.1x and EV/MW of ₹16.8 crore/9.0 crore/5.1 crore, respectively. The company demonstrates significant growth potential in the medium term, with Revenue/EBITDA/PAT projected to expand at CAGRs of 79.0%/117.2%/123.8% to ₹11,250 crore/9,563 crore/1,980 crore over the FY24-27E period. The brokerage has advised investors to subscribe to the issue at the cut-off price for long-term gains.
NTPC Green Energy IPO, which is estimated at ₹10,000 crore, includes only newly issued equity shares, with no element of Offer For Sale (OFS).
The funds raised from this new issuance, amounting to ₹7,500 crore, will be allocated for investments in NTPC Renewable Energy Limited (NREL), for repaying or prepaying certain existing debts linked to NREL, and for general corporate purposes.
The lead managers overseeing this offering are IDBI Capital Markets & Securities Limited, HDFC Bank Limited, IIFL Securities Limited, and Nuvama Wealth Management Limited, while KFin Technologies Limited will serve as the registrar for the offering.
NTPC Green Energy IPO GMP today is +0.80. This indicates NTPC Green Energy share price was trading at a premium of ₹0.80 in the grey market, according to investorgain.com.
Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of NTPC Green Energy share price is indicated at ₹108.8 apiece, which is 0.74% higher than the IPO price of ₹108.
According to the recent 17 sessions of grey market activities, the present GMP ( ₹0.80) indicates a downward trend. The minimum GMP recorded is ₹0, whereas the maximum GMP reached ₹25, as per the experts at investorgain.com.
'Grey market premium' indicates investors' readiness to pay more than the issue price.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
