NTPC Green Energy Ltd., a subsidiary of NTPC Limited, is gearing up for its much-anticipated IPO, with an issue size potentially reaching ₹10,000 crore. This IPO will see NTPC Green Energy issuing fresh shares to the market, with each share having a face value of ₹10. As per the draft red herring prospectus (DRHP) filed with SEBI on September 18, 2024, the company is ready to offer specific quotas for employees, making this IPO an exciting opportunity for investors.
What is NTPC Green Energy?
NTPC Green Energy is a subsidiary of NTPC Limited, focusing exclusively on green energy. The company’s current operational capacity is around 3.2 GW, with another 12 GW in construction, and further projects in the pipeline. As part of NTPC’s strategic plan, NTPC Green Energy aims to achieve a total renewable capacity of 60 GW by 2032. This ambitious target aligns with the Indian government’s push for cleaner energy alternatives.
IPO Details: Expected Date, Size, and Price
The NTPC Green Energy IPO is anticipated to launch in November 2024, though the exact date remains unconfirmed. Market experts estimate the IPO size at approximately ₹10,000 crore, with fresh shares to be issued for investors. These funds will assist NTPC Green Energy in various areas, including debt repayment, expansion projects, and operational advancements.
Why Market Experts Are Bullish on NTPC Green Energy’s Prospects
The green energy sector in India is witnessing significant growth as the government increasingly focuses on sustainable energy. Market experts are optimistic about NTPC Green Energy’s future due to its robust pipeline and ongoing projects in solar, wind, and hydroelectric power. Brokerage firms such as ICICI Securities and Axis Securities have given “Buy” recommendations for NTPC stocks, setting target prices around ₹450, indicating solid growth potential for NTPC and its green energy subsidiary.
Strong Portfolio and Expansion Plans
NTPC Green Energy’s portfolio consists of numerous large-scale renewable projects. According to CRISIL’s analysis, as of June 30, 2024, the company had an operational capacity of 2,925 MW, with 11,771 MW of contracted projects and 10,975 MW in various stages of development. These projects span across more than six states in India and include 37 solar and nine wind projects, underscoring NTPC Green Energy’s commitment to expanding its footprint in the renewable energy space.
Benefits for NTPC Employees in the IPO
The NTPC Green Energy IPO offers unique advantages for NTPC employees. The IPO will feature a reserved quota specifically for employees, who will also be eligible for discounted share prices. Additionally, employees who already own NTPC shares will have multiple options to apply for shares, providing further benefits in terms of increased allotment possibilities.
Fundamental Strength and Financial Outlook
NTPC Green Energy has shown strong growth metrics, with revenue increasing at a compound annual growth rate (CAGR) of 46.8% over recent years. From ₹910 crore in 2022, the revenue surged to ₹1,962 crore in 2024. This positive trend underscores the company’s operational strength and the promising future of its green energy initiatives.
Risks and Considerations
Despite its strong fundamentals, NTPC Green Energy faces certain risks, such as dependency on non-core income and a slight dip in mutual fund holdings. However, the company’s overall performance remains robust, with more positive factors outweighing the negatives. Additionally, market threats remain minimal, as the renewable energy sector is a priority for the government, providing a stable environment for growth.
How to Participate in the NTPC Green Energy IPO
Investors interested in the NTPC Green Energy IPO can apply for shares through various channels, including employee, shareholder, and general quotas. Current NTPC shareholders may apply through a specific shareholder quota, increasing their chances of receiving an allotment. Given NTPC Green Energy’s promising growth outlook, investment in the IPO may yield favorable returns, especially for those holding long-term positions.
Final Thoughts
As NTPC Green Energy prepares to launch its IPO, the company stands out as a key player in India’s renewable energy sector. With a robust portfolio, government support, and ambitious growth targets, NTPC Green Energy holds significant promise for both institutional and retail investors. However, as with any investment, it is recommended to consult a financial advisor before making investment decisions.
With a strong renewable energy focus and ongoing support from NTPC, NTPC Green Energy’s IPO may provide investors with a unique opportunity to invest in India’s green energy future
