NTPC Green Energy IPO: Broker Recommends To Subscribe Rs 10,000 Crore IPO For Long-Term

NTPC Green Energy, a subsidiary of the public sector unit NTPC, is set to launch its Initial Public Offering (IPO) next week. The IPO will be open for retail investors from 19th to 22nd November, closing on the latter date. The company aims to raise ₹10,000 crore through this offering, with shares priced between ₹102 and ₹108 each. The current market enthusiasm for IPOs has generated significant interest among investors.

The renewable energy firm plans to allocate ₹7,500 crore from the IPO proceeds to settle existing debts. The remaining funds will cover general corporate expenses. This IPO is entirely a fresh issue, offering equity shares with a face value of ₹10 each. Employees are offered a discount of ₹5 per share. Investors can purchase shares in lots of 138, with a minimum bid of one lot costing ₹14,904 and a maximum of 13 lots available.

SBI Securities has issued a report recommending a long-term subscription to the NTPC Green Energy IPO. They have set the upper price band at ₹108, valuing it at an EV/EBITDA of 53.4x post-issue capital. The company plans to expand its operational capacity significantly over the next few years, aiming for 6GW by FY25, 11GW by FY26, and 19GW by FY27 from the current 3.3GW. This growth potential contributes to a positive long-term outlook.

The IPO will be open from November 19th to 22nd, with shares priced between ₹102 and ₹108 each. Investors can buy shares in lots of 138, with the total issue size being ₹10,000 crore. The listing date is set for November 27th.

NTPC Green Energy stands as the largest state-owned renewable energy company in India under the Ministry of Power. As of June 30, 2024, its portfolio included 14,696 MW, comprising 2,925 MW of operational projects and 11,771 MW of contracted or acquired projects. Additionally, projects totaling 10,975 MW are in development.

Market Sentiment and Management

The grey market premium (GMP) for NTPC Green Energy indicates positive sentiment ahead of the IPO launch. Currently trading at a premium of ₹3 in the grey market suggests potential listing at around ₹111 per share. However, these figures are speculative and may change.

IDBI Capital Markets & Securities, HDFC Bank, IIFL Securities, and Nuvama Wealth Management are managing the book running for this IPO. KFin Technologies serves as the registrar for this offering.

NTPC Green Energy's strong business foundation and strategic expansion plans position it well within India's renewable energy sector. With substantial projects underway and a robust portfolio, it continues to lead as a state-owned entity in electricity generation capacity.