The IPO of NTPC Green Energy, a government company in the renewable energy sector, received a sluggish response from investors on the second day as well. This IPO was subscribed only 88 percent on its second day. At the same time, its gray market premium has also come down to just 1 percent. This IPO will remain open for subscription till November 22. The company has fixed the price band for the IPO at Rs 102-108 per share. While the size of the IPO is Rs 10,000 crore. This government company is a subsidiary of already listed PSU NTPC.
How is the subscription status
About 75% of the public issue of this company is reserved for qualified institutional buyers and this portion is 74% filled. 15% of the IPO is reserved for non-institutional investors and it has been filled 0.30 times or 30% so far. 10% of this is reserved for retail investors and it has been filled 2.23 times or 223% so far. Shares worth Rs 200 crore have been reserved for employees. Eligible employees will also get a discount of Rs 5 per share on share purchase.
NTPC Green Energy GMP
There is no special craze for the government company NTPC Green Energy in the grey market. It is at a premium of Rs 1 in the grey market. In this regard, there are indications of listing of the stock at Rs 109 as against the IPO price of Rs 108. NTPC Green Energy IPO The size of the IPO of the renewable energy sector company is Rs 10000 crore. There will be no Offer for Sale (OFS) in this. Retail investors will have to bid for at least 138 shares. The bookrunning lead managers for NTPC Green Energies IPO are IDBI Capital Markets & Securities, HDFC Bank, IIFL Securities and Nuvama Wealth Management. While the registrar for the offer is KFin Technologies.
Advice to subscribe
Brokerage house SBI Securities has advised to subscribe for the long term on NTPC Green IPO. The brokerage says that at the upper price band of Rs 108, the company is valued at 53.4x on issued capital after FY24 EV/EBITDA. The company will increase its operating capacity to 6, 11 and 19 GW by FY25E, FY26E and FY27E from 3.3 GW by September 2024. The company has the potential for rapid growth in the mid-term. The company’s revenue, EBITDA and PAT are expected to grow at a CAGR of 79.0%, 117.2% and 123.8% to Rs 11,250 crore, Rs 9563 crore and Rs 1980 crore over the FY24-27E period.
Growth strategy of the company
• The company continues to grow its project pipeline through prudent bidding and strategic joint ventures with PSUs and private corporates.
• The company is focused on projects in new energy solutions such as green hydrogen, green chemicals and battery energy storage systems (BESS).
• Continuous reduction in efficiency and cost in project execution and operations and maintenance.
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• Continues to contribute to India’s sustainability efforts.
• Strong product portfolio with diversification across geographies and off-takers Experience in renewable energy project execution.
what is the business of the company
NTPC Green Energy is the largest renewable energy enterprise (excluding hydro) in the public sector in terms of operational capacity as of June 2024 and electricity generation in FY2024. NTPC Green’s portfolio comprised 14,696 MW, including operational projects of 2,925 MW and contracted and awarded projects of 11,771 MW. The company’s renewable energy portfolio comprises solar and wind power assets located at multiple locations in over 6 states, which helps mitigate the risk of location-specific generation variability.
NTPC Green Energy’s revenue from operations grew at a CAGR of 46.82% from Rs 910.42 crore in FY 2022 to Rs 1,962.6 crore in FY 2024. The company’s net profit grew at a CAGR of 90.75% from Rs 94.74 crore in FY 22 to Rs 344.72 crore in FY 24.