NTPC Green Energy signs MoU with Gujarat govt.

New Delhi:

The Initial Public Offering (IPO) of NTPC Green Energy Ltd (NGEL), a subsidiary of the Maharatna public sector enterprise NTPC Ltd, opened for subscription from today, Tuesday.

The IPO is offered, at a price band of Rs 102-108 per share, and subscription is open until Friday. The company plans to raise a total of Rs 10,000 crore and is scheduled to list on the stock exchanges on November 27.

Shareholders of NTPC can apply for the IPO under a special shareholder quota. Additionally, NTPC employees have a separate quota for applying.

The lot size for the IPO is 138 shares. The shares will be transferred to demat accounts on November 26.

NGEL aims to scale its operational renewable capacity to 19 GW by FY27, reflecting its commitment to India’s clean energy transition.

This IPO is part of NTPC Ltd’s broader strategy to achieve 60 GW of renewable energy capacity by 2032. NTPC currently contributes 24 per cent of India’s total power generation and views NGEL as a critical vehicle to drive its renewable energy ambitions.

As of September 2024, NGEL operates 3,220 MW of solar and 100 MW of wind power projects. The company has a robust pipeline with 13,576 MW of contracted and awarded projects and an additional 9,175 MW in development.

NGEL’s renewable projects span key states such as Rajasthan, Gujarat, Tamil Nadu, and Uttar Pradesh. This geographical diversification mitigates risks associated with location-specific generation variability, ensuring stable and reliable energy output.

With NTPC’s extensive experience in project development and execution, NGEL is well-positioned to deliver on its ambitious targets. The company’s ownership of 8,900 acres of freehold land and 45,700 acres of leasehold land further bolsters its foundation for future expansion.

Beyond conventional solar and wind energy, NGEL is exploring advanced solutions like green hydrogen, green chemicals, and battery energy storage systems. These initiatives align with India’s sustainability goals and position NGEL to tap into emerging opportunities in the global clean energy market.

NGEL benefits from NTPC’s strong financial backing, ensuring access to low-cost capital. This advantage is crucial for maintaining profitability in the capital-intensive renewable energy sector. The company’s operational efficiencies and strategic focus further enhance its market competitiveness.

At the upper price band of Rs 108 per share, NGEL is valued at an FY24 EV/EBITDA multiple of 53.4x. Analysts have expressed confidence in the company’s long-term growth potential and recommended for subscription for investors seeking sustainable and long term profitable opportunities.

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The primary market will remain abuzz with more than half a dozen companies, including Hyundai Motor India, Swiggy, and NTPC Green Energy, lined up initial public offerings over the next two months to raise around ₹60,000 crore, merchant bankers said.

Apart from these three firms, Afcons Infrastructure, Waaree Energies, Niva Bupa Health Insurance, One Mobikwik Systems, and Garuda Construction are among the companies planning to launch initial public offerings (IPOs) during October-November, they added.

Together, these firms are looking to raise ₹60,000 crore through their IPOs.

Munish Aggarwal, Managing Director and Head – Equity Capital Markets at Equirus, expects over 30 IPOs to be launched between September-end and December. This will be across sectors, deal sizes and a combination of fresh issues and offers for sale.

The strong momentum in IPO markets is driven by several key macroeconomic, sector-specific factors and the willingness of funds to look at new ideas, which is partially led by strong inflows into domestic mutual funds and the robust capital formation happening across corporate India, he added.

The companies are tapping the primary market to raise funds for expansion plans, retire debt, support working capital requirements and provide exit routes to the existing shareholders.

Hyundai Motor India Ltd, the Indian subsidiary of South Korea’s Hyundai Motor Company, is expected to raise ₹25,000 crore, making it the largest-ever IPO in India.

This could surpass LIC’s ₹21,000-crore initial share sale.

The automaker’s entire issue will be an offer-for-sale (OFS) of 14,21,94,700 shares by Hyundai Motor Company, with no fresh issue component, according to its draft red herring prospectus (DRHP).

Other major IPOs lined up include food and grocery delivery giant Swiggy, which according to sources, is targeting to raise ₹10,414 crore via fresh issue and OFS.

Swiggy’s IPO consists of a fresh issue of shares worth ₹3,750 crore and an OFS component of 18.52 crore worth ₹6,664 crore.

Further, NTPC Green Energy, the renewable energy arm of state-owned NTPC, is looking to launch its ₹10,000 crore IPO in the first week of November, sources told PTI earlier.

Shapoorji Pallonji Group’s construction firm Afcons Infrastructure will also join the IPO rush with a ₹7,000 crore offer while Waaree Energies is expected to raise ₹3,000 crore through a fresh issue of shares, in addition to an OFS component.

Niva Bupa Health Insurance and One Mobikwik Systems are planning to raise ₹3,000 crore and ₹700 crore, respectively.

Moreover, 62 companies, including Bajaj Housing Finance, Ola Electric Mobility, and FirstCry’s parent Brainbees Solutions have already mobilised around ₹64,000 crore collectively via mainboard, marking a 29% increase from ₹49,436 crore collected by 57 firms through the route in 2023.

The primary market is experiencing strong interest from issuers and investors across various sectors.

Going ahead, the outlook for the IPO market in 2025 remains broadly positive as Sebi approved 22 IPOs as of now with companies planning to raise around ₹25,000 crore, V Prashant Rao Director & Head – ECM, Investment Banking at Anand Rathi Advisors, said.

Additionally, over 50 firms have filed draft papers and are awaiting approval.

Cumulatively, these companies aim to raise more than 1 lakh crore, reflecting the significant momentum in the IPO market, he added.

The positive sentiment is supported by strong macroeconomic fundamentals, favourable market conditions, and sectoral growth.

Further, there are no signs of the IPO frenzy fizzling out and this behaviour might persist in the short term. However, risks like market corrections and regulatory interventions could moderate the enthusiasm, Vaibhav Porwal, Co-founder, Dezrev, said.

NTPC Green Energy is a ‘Maharatna’ Central Public Sector Enterprise with renewable energy portfolio, including solar and wind power assets. File
| Photo Credit: Reuters

Shares of NTPC jumped by more than 4% to hit an all-time high on Thursday (September 19, 2024) after NTPC Green Energy, the renewable energy arm of the firm, filed preliminary papers with capital markets regulator Securities and Exchange Board of India (SEBI) to raise ₹10,000 crore through an Initial Public Offering (IPO).

The stock climbed 4.34% to ₹431.85 — its record high — on the BSE. At the NSE, it surged 4.27% to ₹431.85 — the all-time high.

The initial share-sale is entirely a fresh issuance of equity shares with no Offer For Sale (OFS) component, according to the Draft Red Herring Prospectus (DRHP).

The renewable energy firm said proceeds of the issue to the tune of ₹7,500 crore will be used to repay or prepay part or all of its subsidiary NTPC Renewable Energy Limited’s (NREL) outstanding loans, while a portion will be utilised for general corporate purposes.

NTPC Green Energy is a ‘Maharatna’ Central Public Sector Enterprise with renewable energy portfolio, including solar and wind power assets.

IDBI Capital Markets & Securities, HDFC Bank, IIFL Securities, and Nuvama Wealth Management are the book-running lead managers to the issue.