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The upcoming NTPC Green Energy IPO is generating significant interest among investors, particularly those holding shares in the parent company, NTPC Ltd. The IPO, scheduled to open on November 19th and close on November 22nd, has a special 10% allocation reserved for NTPC shareholders, granting them a higher chance of securing an allotment. This shareholder quota is available to anyone holding even a single share of NTPC as of November 13th, the date the Red Herring Prospectus (RHP) was filed.
While the news of the shareholder quota has generated excitement, it's crucial to note that purchasing NTPC shares after November 13th will not make investors eligible for this special allocation. Those interested in participating in the IPO through the shareholder quota must have held NTPC shares before the cutoff date. However, they can still participate through other means, such as asking a current NTPC shareholder to apply on their behalf.
The NTPC Green Energy IPO is attracting attention due to the recent successful listings of other green energy companies, Premiere Energies and Waaree Energies. However, the grey market premium, a gauge of anticipated listing gains, for NTPC Green Energy has been declining in recent days. From Rs 25 on November 9th, it has fallen to just Rs 2 on November 15th, indicating moderate expectations for listing gains. Despite this, the price band for the IPO has been set at Rs 102-108 per share.
Analysts from ICICI Securities, in their assessment of NGEL's business, highlight its operational capacity of 3.2GW, 12GW of contracted under-construction renewable energy (RE) projects, and a future development pipeline of 11GW. They anticipate higher return ratios for captive RE projects compared to utility-scale projects. The IPO comes at a strategic time for NTPC, as the company seeks to diversify into renewable energy sources and bolster its revenue streams, particularly in the context of growing focus on sustainable energy solutions. The NTPC Green Energy IPO aims to raise up to Rs 10,000 crore through a fresh issue, with no offer for sale component. The proceeds will be primarily used for investment in NTPC Renewable Energy Limited (NREL), repayment of outstanding borrowings, and general corporate purposes.
NTPC Green Energy, as the largest renewable energy public sector enterprise (excluding hydro) in terms of operating capacity, boasts a portfolio of both solar and wind power assets across six states. This diversification helps mitigate the risks associated with location-specific generation variability. The company's revenue from operations has grown at a CAGR of 46.82 per cent from Rs 910.42 crore in Fiscal 2022 to Rs 1,962.60 crore in Fiscal 2024. Its Operating EBITDA and profit after tax have also shown substantial growth during this period.
In conclusion, the NTPC Green Energy IPO presents an opportunity for investors to participate in the burgeoning renewable energy sector. The company's strong track record, diversified portfolio, and the increasing demand for green energy make it an attractive proposition. While the grey market premium suggests moderate expectations for listing gains, the IPO's success will depend on various factors, including investor sentiment and the overall market conditions.
Source: NTPC Green Energy IPO: Can You Buy NTPC Shares Now To Be Eligible Under Shareholders' Quota?