NTPC Green Energy IPO 2024 Highlights: GMP, listing, subscription status, and other details

"The company has posted net profits for the reported financial periods, although the IPO is considered aggressively priced based on FY25 annualised earnings. Investors who are well-informed and have surplus cash might consider investing moderate funds for the long term, as this represents a pure long-term investment opportunity," said Bajaj Broking in an IPO note.

The IPO of NTPC Green Energy offers investors a chance to invest in a prominent company within India’s renewable energy market, supported by the significant resources and expertise of NTPC, said Rajan Shinde, Research Analyst at Mehta Equities. With a substantial portfolio of 26,071 MW that encompasses operational, contracted, and pipeline projects, the company shows significant growth potential. The emphasis on long-term Power Purchase Agreements (PPAs) with public utilities and government entities guarantees consistent revenue flows, while its varied geographical footprint reduces risk.

NTPC Green Energy IPO was subscribed 36% on Day 01, November 19. The retail portion was booked fully, getting subscribed 1.47 times. The NII portion was booked 0.17 times and the other category was subscribed 63%.

NTPC Green Energy is strategically leveraging emerging technologies while maintaining robust operational efficiency through its integrated business model. The company is cautiously bidding for firm and dispatchable renewable energy (FDRE), round-the-clock (RTC), and hybrid projects, recognizing that current tariffs may not yet ensure sustainable returns due to high battery costs.

NTPC Green Energy has maintained strong EBITDA margins at 89% for an average of 3 years average. Its net profit margins stands at 20% for the average of 3 years over FY22-24, which is led by superior execution and economies of scale, said Geojit Financial Services.

On valuation parse at the upper price band Rs 108, the issue is asking a market cap of Rs 91,000 crore and based on FY25 annualized earnings and fully diluted post IPO paid-up capital, the company is asking for a PB of 4.96x and PE of 259.56x which appears aggressively priced. But considering its current established capacities and future expanded capacities, this is a pure long term story, said Anand Rathi Research.

"The company is well placed to capture the tailwind from capacity addition in renewables owing to its strong parentage (NTPC), low operating costs diversified capacity portfolio and access to lower cost of capital. Therefore we believe that this issue may be considered for its long-term growth. Hence we give a “Subscribe for Long Term” rating to this IPO," said Anand Rathi Research in an IPO note.

NTPC Green Energy was fetching a premium of 0.74% in the grey market on November 20. This indicates the listing of the shares at Rs 108.8 on the bourses. The listing of shares is expected on November 27. The grey market is an irregulated place where shares change hands illegally.

The company’s portfolio across six Indian states mitigates region-specific risks and optimises solar and wind resources. Long-term power purchase agreements (PPAs), averaging 25 years, ensure steady revenue.

“The energy demand in India is projected to grow by 5.5-6.0% over the next five years, driven by infrastructure investments, strong economic fundamentals, T&D expansion, and government reforms to enhance the power sector,” said a note of Geojit Financial Services.

The company’s portfolio is spread out across Rajasthan, Gujarat, Tamil Nadu, Andhra Pradesh, Madhya Pradesh and Uttar Pradesh which helps in mitigating the risk of location-specific generation variability. As of March 31, 2024, its operating/contracted and awarded megawatts capacities were 12396 MW for Solar and 2100 MW for Wind, which was at 6011 MW and 2300 MW as of March 31, 2022, respectively.