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

The NTPC Green Energy IPO achieved a subscription rate of 33% on its opening day, November 19, with bids placed for 19.48 crore shares out of a total of 59.3 crore shares available.

Retail individual investors (RIIs) demonstrated significant interest, subscribing to 133% of their allocated 8.6 crore shares. Non-institutional investors (NIIs) bid for 2 crore shares, representing 15% of their 12.9 crore share allocation. In contrast, qualified institutional buyers (QIBs) showed minimal participation, subscribing to just over 87,906 shares out of the 25.9 crore shares set aside for them. The portion reserved for employees saw a 17% subscription rate.

The company is issuing fresh equity worth Rs 10,000 crore, comprising approximately 92.59 crore shares. The allocation includes 75% reserved for Qualified Institutional Buyers (QIBs), 15% for High Net-Worth Individuals (HNIs), and 10% for retail investors.

India’s renewable energy capacity has experienced a remarkable five-fold increase over the last decade, reaching 201 GW. Solar power leads this transformation, contributing 44% (89 GW) to the total.

The government’s ambitious goal of achieving 450 GW of renewable capacity by 2030 is driving this growth. Key policy measures such as inter-state transmission charge waivers, renewable purchase obligations (RPOs), and the ₹197 billion Green Hydrogen Mission are laying a strong foundation for expansion, creating significant opportunities in the renewable energy sector.

NTPC Green Energy stands as one of the largest public sector enterprises in the renewable energy domain (excluding hydropower), both in terms of operational capacity and power generation.

As of June 30, 2024, the company’s portfolio includes 14,696 MW, comprising 2,925 MW of operational projects and 11,771 MW from projects already contracted or awarded. Beyond this, it has an additional 10,975 MW of capacity under development, bringing its total pipeline and portfolio to an impressive 25,671 MW.

Looking ahead, NTPC Green has ambitious plans to expand its pumped hydro capacity. Over the next 6–9 years, the company aims to commission 14 GW of pumped hydro capacity, a significant increase from its current 3.3 GW. Another 5.9 GW is already under construction, with 10.8 GW in the planning stages.

In line with its long-term strategy, NTPC Green is targeting 60 GW of renewable energy capacity by 2032, reinforcing its position as a major player in India’s clean energy transition.

The NTPC Green Energy IPO is set to debut on the stock market next week. Shares will be listed on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) on November 27. Trading is scheduled to commence at 10 AM on the listing day.

The NTPC group has set an ambitious target to achieve 60 GW of renewable energy capacity by 2032. At present, it has 3.5 GW of operational capacity, with more than 28 GW currently under development.

The initial public offering (IPO) of NTPC Green Energy was subscribed 33% on its opening day, Tuesday. The issue garnered bids for 19.46 crore shares against the total 59.32 crore shares available for subscription.

NTPC Green, the renewable energy arm of NTPC, saw robust interest from retail investors, with the retail portion fully subscribed at 1.33 times. Meanwhile, the non-institutional investors (NII) category recorded a subscription of 15%. The segment for qualified institutional buyers (QIBs), however, saw a slower start, receiving 87,906 bids compared to the 25.88 crore shares allocated to this category.

– Retail Portion: The retail segment witnessed strong interest, with a subscription rate of 1.33 times

– Non-Institutional Investors (NII): This category saw a modest response, with a subscription of 0.16 times

– Reservation Portion: Subscriptions reached 0.57 times for this -segment on the first day

– Employee Portion: The employee category recorded a subscription of 0.17 times

– Qualified Institutional Buyer (QIB) Portion: This segment has yet to gather momentum

NTPC Green Energy was subscribed to a total of 35% times as of 1700 IST on November 19 (Day 01). Retail individual investors booked the issue 1.40 times while the employee category was booked 18%. The NIIs booked the issue 0.16 times and QIBs didn’t show interest on the first day.

The company’s focus on maintaining high capacity utilization, operational efficiencies, and low operating costs along with its strong parentage and diversified portfolio helps it to maintain healthy coverage ratios.

“The company along with the NTPC Group have a strong track record of developing, constructing and operating renewable power projects, driven by experienced in-house management and procurement teams. NGEL’s in-house team works with third-party aggregators, developers and EPC contractors to manage the land acquisition process,” said Lemonn in an IPO note.

The solar energy sector in India is growing exponentially, backed by robust government support demonstrated through an aggressive tendering strategy. Some of the key catalysts include technological advancements, affordable financing, supportive policies, thrust on go-green initiatives/sustainability targets, cost optimization due to increased grid electricity tariffs, subsidy initiative (especially in rooftop solar) and various incentives such as ISTS charge waiver.

NTPC Green Energy IPO gets fully subscribed to a total of 0.31 times. The retail portion was subscribed 127% against the offered shares, receiving bids worth Rs 1,115 crore. The NII segment was subscribed 0.13 times.

NTPC Green Energy‘s average capacity utilisation factor (CUF) for solar assets improved from 19% to 24% between FY22- FY24, which indicates efficient utilisation & increased power generation.

Shares of NTPC Green Energy were fetching a premium of 0.65% in the grey market, indicating listing at Rs 108.70 against the issue price of Rs 180. The grey market is an unofficial place to trade shares illegally ahead of listing.

“NTPC green energy is one of the leading renewable power generating PSU having solar and wind power generation assets alongside increase focus on hydroelectric assets and power storage plans. It is going to be the leader in the segment with additional activities on hydroelectric projects. The company aims to increase its operational capacity to 6, 11, 9 GW by FY25, FY26, FY27 respectively from 3.3 GW as of Sep’24,” said Anand Rathi Research in an IPO note.

“The company has maintained strong EBITDA margins at 89% (3-year average) and PAT margins at 20% (3-year average) over FY22-24, led by superior execution and economies of scale,” said Geojit Financial Services in an IPO note.

The retail portion of NTPC Green Energy IPO get fully subscribed on Day 01, November 19. The retail individual investor segment was subscribed 1.03 times. It got subscribed to a total of 0.25 times.

“NTPC Green Energy’s portfolio across six Indian states mitigates region-specific risks and optimizes solar and wind resources. Long-term power purchase agreements (PPAs), averaging 25 years, ensure steady revenue. FY24’s weighted average tariff of Rs3.4/kWh exceeds the Rs3.1-3.3/kWh required for 10-13% equity internal rate of return or IRR,” said InCred Equities in an IPO note.

The retail section is about to be booked fully. It has been subscribed 0.89 times as of 1250 IST on November 19. The IPO has been booked 0.21 times totally during the same time.

The installed renewable energy capacity (including large hydro) in India to increase to about 250 GW by March 2026 from the level of 201 GW as of September 2024, expects ICRA. The capacity addition will be driven by the large project pipeline of over 80 GW, following the significant improvement in tendering activity in FY24, said ICRA in a media release. Moreover, the tendering activity remained high in the current fiscal, in line with the 50 GW annual bidding trajectory announced by the Government of India in March 2023.

The issue includes a reservation of up to 19,417,476 shares for employees offered at a discount of Rs 5 to the issue price. The employee segment was booked 10% as of 1200 IST on November 19.

India’s renewable energy capacity has grown five-fold over the past decade to 201GW, with solar contributing 44% (89GW). The government’s target of 450GW of renewable capacity by 2030F, supported by inter-state transmission charge waivers, renewable purchase obligations (RPOs), and a Rs197bn Green Hydrogen Mission, creates robust growth opportunities.

“With strong parentage and a diversified portfolio backed by long-term PPAs (power purchasing agreements), NTPC Green Energy is well-positioned to meet NTPC’s target of 60 GW renewable capacity by 2032,” said Geojit Financial Services in a research note.

Retail individual investors are showing impressive interest in the IPO of NTPC Green Energy, subscribing the issue 0.65 times. The employees section was subscribed 0.08 times. The IPO was booked to a total of 0.15 times as of 1140 IST on November 19 (Day 01).

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 power sector.

“If we attribute annualized FY25 earnings to post-IPO fully diluted equity base, then the asking price is at a P/E of 37.19 and based on FY24 earnings, the P/E stands negative. Thus the issue appears aggressively priced. PAT margins and RoCE margins data is missing from the offer documents,” said Bajaj Broking in an IPO note.

Retail individual investors susbcribed the issue 0.42 times as of 1050 IST on Novembeer 19. The IPO was subscribed to a total of 0.10 times. The employee section was booked 0.05 times and NIIs booked it 0.04 times.

“At the upper price band of Rs 108, the company is available at P/Bv of 4.9x (on FY25E annualised financials), which appears to be fairly priced. We assign a “Subscribe” rating for the issue on a long-term investment basis, considering its strong brand recall, superior execution capabilities, portfolio expansions, investment in nextgen energy solutions (Battery Energy Storage Systems & Green Hydrogen derivatives), and promising industry outlook,” said Geojit Financial Services in a research report.

“The company is well placed to capture the tailwind from capacity addition in renewables owing to its strong parentage (NTPC), low operating costs along with 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 “Subscribe for Long Term” rating to this IPO,” said Anand Rathi Research in an IPO note.