NTPC Green Energy shares list at ₹111.50, opening just 3.2% above IPO price in a much awaited debut

NTPC Green Energy IPO Listing: NTPC Green Energy shares made a muted debut on the bourses on Wednesday, November 27. They listed at ₹111.5 on NSE, a premium of just 3.2 percent over the issue price of ₹108. Meanwhile, on BSE, it listed at ₹111.60, up 3.33 percent from IPO price.

NTPC Green's initial public offering (IPO), valued at ₹10,000 crore, was open for subscription from November 19 to November 22. The green energy company's shares were priced in the range of ₹102-108 per share for the issue.

Following the three days of bidding, NTPC Green IPO closed with robust demand, garnering 2.55 times bids. The IPO received bids for 142.65 crore shares against 56 crore shares on offer. The retail investor segment was booked 3.59 times, while the non-institutional investors (NII) category wasn't fully subscribed and was bid 0.85 times. The qualified institutional buyers (QIB) portion was subscribed 3.51 times. Finally, the employee and others quota were booked 0.83 times and 1.67 times, respectively.

About the IPO

NTPC Green IPO was entirely a fresh issue of 92.59 crore shares. Post the issue, promoter shareholding in the company will be reduced to 89 percent from 100 percent before the IPO. The company raised ₹3,960 crore from anchor investors on November 18, 2024. Retail investors could apply with a minimum lot size of 138 shares, requiring a minimum investment of ₹14,904.

The company plans to use the net proceeds from its fundraising primarily for two objectives: first, to invest in its wholly-owned subsidiary, NTPC Renewable Energy Limited (NREL), to facilitate the repayment or prepayment, either in full or in part, of certain outstanding borrowings availed by NREL, and second, for general corporate purposes.

NTPC Green has allocated 1.94 crore equity shares for its eligible employees, offering them a ₹5 per share discount. Of the net offer, 26.37 percent is reserved for qualified institutional bidders (QIBs). Non-institutional investors (NIIs) and retail investors will have allocations of 13.19 percent and 2.1 percent of the net offer, respectively.

IDBI Capital Market Services Limited, HDFC Bank Limited, IIFL Securities Ltd and Nuvama Wealth Management Limited are the book running lead managers of the NTPC Green Energy IPO, while KFin Technologies Limited is the registrar for the issue.

Brokerage Views

The much-anticipated initial public offering (IPO) of NTPC Green Energy, the renewable energy arm of NTPC Limited, has garnered positive sentiment from brokerages, with several recommending a long-term subscription.

Reliance Securities highlighted the company’s financial strength, credit ratings, and expertise in large-scale renewable projects. Its focus on green hydrogen and energy storage positions it well to support India’s net-zero goals. “The prudent business model and strong earnings growth justify subscribing for the long term,” the brokerage noted.

SBI Securities also endorsed the IPO, valuing it at an FY24 EV/Ebitda multiple of 53.4x at the upper price band of ₹108. It projects operational capacity to rise from 3.3 GW in September 2024 to 19 GW by FY27E, with revenue, Ebitda, and PAT growing at CAGRs of 79 percent, 117.2 percent, and 123.8 percent, respectively. “The issue is attractively priced, making it a strong long-term investment,” SBI Securities said.

Swastika Investmart emphasized NTPC Green Energy’s diversified portfolio and consistent top-line growth, though it cautioned about short-term profitability fluctuations. Despite noting aggressive pricing, it recommended the IPO for its long-term potential.

Overall, NTPC Green Energy's robust growth outlook and strategic focus on renewable energy make it a compelling investment for those seeking exposure to India’s sustainable energy sector.

About the Company

Incorporated in April 2022, NTPC Green Energy Limited, a wholly-owned subsidiary of 'Maharatna' NTPC Limited, focuses on developing non-hydro renewable energy projects through both organic and inorganic growth strategies. As of September 30, 2024, the company had an operational capacity of 3,320 MW with 3,220 MW from solar projects and 100 MW from wind projects across six states. NTPC Green Energy earns revenue by selling solar and wind power to Indian government agencies and public utilities through Power Purchase Agreements. By June 30, 2024, its total portfolio reached 14,696 MW, comprising 2,925 MW of operational projects and 11,771 MW of contracted and awarded projects.

NTPC Green Energy reported a significant financial performance, with its revenue surging by 1,094.19 percent and profit after tax (PAT) rising by 101.32 percent between the fiscal years ending March 31, 2024, and March 31, 2023.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.