NTPC Green Energy IPO: So far, 88% of the issue has been booked on the second day; Check the latest GMP

The initial public offering (IPO) of NTPC Green Energy continued to receive good response from investors on the first day of the bidding process. The issue, whose offering began on Tuesday, November 19, closed on the first day with a bid rate of 35 percent thanks to interest from retail investors and QIB bidders.

NTPC Green Energy is selling its shares in the price range of Rs 102-108 per piece. Investors can apply for at least 138 stocks and multiples thereafter. The company is aiming to raise Rs 10,000 crore through an initial public offering, which will be a fresh sale of 92,59,25,926 shares only.

According to the data, investors placed bids for 52,44,90,528 shares or 88 percent as of 3:25 pm on Thursday, November 21, compared to the 59,31,67,575 shares offered for subscription. The tender for the issue ends on Friday, November 22nd.

The allotment for retail investors was subscribed 2.24 times while the portion reserved for non-institutional investors (NIIs) recorded 30 per cent subscription. The shares for employees and shareholders were recorded at 36 percent and 94 percent, respectively. However, the quota intended for qualified institutional bidders (QIBs) was 74 percent at that time.

NTPC Green Energy was founded in April 2022 and is promoted by NTPC under the Ministry of Energy. It is a renewable energy company focused on delivering projects through organic and inorganic routes. The company had an operating capacity of 3,071 MW from solar projects and 100 MW from wind projects in six states as of August 31, 2024.

NPTC Green Energy’s gray market premium has taken a major hit amid increasing volatility in the overall market. It was last reported that the company fetched a premium of Rs 0.40 in the unofficial market, indicating a flat listing for investors. However, the premium in the gray market was around Rs 1 on the first day of the tender.

Brokerage firms have been mostly positive about the issue, but only recommend it for a long-term subscription. They positively rate the company’s strong pedigree, increasing demand for renewable energy, long-term contracts for customers, positive cash flows and high liquidity. However, his biggest concerns are high valuations and a reversal in government policy.

NTPC Green is valued at an EV/EBITDA of 53.6 and an EV/MV of 32 on a FY24 basis. As of September 30, 2024, NTPC Green’s operating capacity is 3.3 GW. The company aims to increase its operating capacity to 6GW/11GW/19GW by FY25E/26E/27E, registering a CAGR of 87 per cent over FY24-27E, Indsec Research said.

“NTPC Group aims to expand its non-fossil fuel capacity to 60 GW by 2032. Locally available execution capabilities backed by strong lineage, tailwinds for industry growth and participation in Battery Energy Storage System (BESS) bode well for growth. “The IPO is aggressively priced.” We therefore rate the IPO as a “long-term subscribe.”

NTPC Green Energy has allotted 36,66,66,666 shares to anchor investors and raise Rs 3,960 crore at a price of Rs 108 per share. For the quarter ended June 30, 2024, NTPC Green Energy reported a net profit of Rs 138.61 crore on revenue of Rs 607.42 crore. The company posted a profit of Rs 344.72 crore and a turnover of Rs 2,037.66 crore in the financial year 2023-24.

The company has reserved shares worth Rs 200 crore for its eligible employees while shares worth Rs 1,000 are reserved for eligible shareholders of NTPC. 75 percent of the net offering is reserved for qualified institutional bidders, while non-institutional investors will receive 15 percent of the net offering. Private investors only receive 10 percent of the net offer.

NTPC Green Energy is positioned to play a critical role in India’s transition to renewable energy by leveraging its status as a subsidiary of NTPC Ltd. uses. With a robust operating capacity of 3,320 MW in solar and wind projects and a robust pipeline of around 22,751 MW, the company is well positioned to benefit from the expected growth in the renewable energy sector, KR Choksey Finserv said.

“India’s renewable energy capacity is expected to grow significantly by FY2029 with an estimated solar capacity addition of 137-142 GW and wind power addition of 34-36 GW. Operating EBITDA recorded significant increases and ensured strong margins between 86 and 90 percent. NGEL’s “An established financial track record coupled with significant growth opportunities,” it said with a subscribe tag.

IDBI Capital, IIFL Securities, HDFC Bank and Nuvama Wealth Management are the underwriters of the NTPC Green Energy IPO while Kfin Technologies is the registrar for the issue. The company’s shares will be listed on both the BSE and NSE on Wednesday, November 27.