NTPC Green Energy IPO: Date, Price, GMP, Allotment, Pros & Cons Among 10 Things To know Of Rs 10,000 Cr IPO

NTPC Green Energy IPO: The Maharatna PSU giant, NTPC Ltd's green energy subsidiary's Rs 10,000 crore IPO is much-awaited after the Diwali festival. The NTPC Green Energy IPO has received Sebi's green signal to launch it for subscription. The proposed shares in the offer will be listed on BSE and NSE. The IPO is anticipated to open later in the current month.

NTPC Green with the third-largest contracted capacity of 15GW is tailing Renew Power which has a 16GW capacity, and Gautam Adani-backed company Adani Green Energy with a 27GW capacity in the lead.

Here are 10 key points to know about the IPO:

1. The Rs 10,000 crore IPO is expected to be launched later in November. Accordingly, the dates of the IPO, price band, and anchor investors' bidding will be announced in due course.

2. The IPO filed its draft prospectus with Sebi on September 18, 2024. The public offer is purely a fresh issue worth Rs 10,000 crore.

3. The IPO size will be reserved for qualified institutional buyers (QIBs), non-institutional investors (NIIs), retail individual investors (RII) and employees.

4. Booking running lead managers of the IPO are IDBI Capital Markets & Securities, HDFC Bank, IFL Securities, and Nuvama Wealth Management. The registrar of the IPO is KFinTechnologies

5. The proceeds of the IPO will be used for investment in its wholly owned Subsidiary, NTPC Renewable Energy Limited (NREL) for repayment/ prepayment, in full or in part of certain outstanding borrowings availed by NREL. The investment will be to the tune of Rs 7,500 crore. A portion will be kept for general corporate purposes among others.

6. GMP: The last grey market premium (GMP) on IPO Central for NTPC Green Energy stood at Rs 34 per share. While Rs 6,500 was subject to SAUDA.

7. Price BAND: As per ICICI Direct's website, the price band is likely to be in the range of INR 100-120 per share, depending on market conditions at the time of the listing.

8. After the IPO, the other processes are allotment of shares, initiation of refunds, credit of equity shares, and listing. Proposed equity shares will list on BSE and NSE.

9. Risks that potential investors should be aware of, as per ICICI Direct:

- Regulatory Risks: Renewable energy projects are often subject to changing government policies and regulatory frameworks. Any unfavourable policy changes could impact the company's revenue and profitability.

- Competition: NTPC Green Energy faces competition from other renewable energy players like Adani Green Energy, Tata Power Renewable Energy, and ReNew Power. This could put pressure on margins as companies compete for large contracts and projects.

- Project Delays: Large-scale renewable energy projects can sometimes face delays due to land acquisition issues, environmental clearances, or supply chain disruptions, which could affect NTPC Green Energy's growth projections.

- Dependence on Government Support: While government policies currently favor the renewable energy sector, a change in political priorities could impact subsidies or incentives, affecting the company's growth plans.

10. Invest In NTPC Green Energy IPO?

As per ICICI Direct, investing in NTPC Green Energy's IPO offers potential investors a chance to participate in India's clean energy transition. Key strengths of the company highlighted by the brokerage are:

1. Strong Parent Company: NTPC Ltd, the parent company of NGEL, is India's largest power producer with decades of experience in the energy sector. This gives NGEL a strong foundation and access to technical expertise and financial backing.

2. Clear Growth Prospects: With India's renewable energy sector growing rapidly and NGEL's plans to expand its solar, wind, and hybrid projects, the company is well-positioned for long-term growth.

3. Focus on Green Hydrogen: NTPC Green Energy's ventures into green hydrogen offer exciting new possibilities for future revenue streams, as green hydrogen is expected to play a crucial role in global energy systems.

"The NTPC Green Energy IPO is a unique opportunity for investors to tap into India's renewable energy boom. With the company's strong financial performance, clear growth strategies, and a commitment to clean energy, it presents a compelling case for investment. However, potential investors should weigh the risks and rewards carefully and consult with financial advisors to make informed decisions," ICICI Direct said on its website.

NGEL is an umbrella company for the green business initiatives of NTPC and undertakes projects through organic and inorganic routes and aims to be the flag-bearer of NTPC's green energy journey to achieve the ambitious target of 60 GW by FY 32.