NTPC Green Energy IPO Set to Launch: Key Details, Market Insights, and Grey Market Premium

NTPC Green Energy, a wholly-owned subsidiary of NTPC Limited, is preparing to launch its much-anticipated Initial Public Offering (IPO). The IPO is expected to go live between November and December 2024. The company has already filed its IPO documents, and grey market activity has begun.

This article covers essential updates on the IPO, including anticipated dates, Grey Market Premium (GMP), and financial details.

NTPC Green Energy IPO Details

• Anticipated IPO Launch: November-December 2024
• Current Grey Market Premium (GMP): ₹36
• Bulk High Net-worth Individual (BHNI) Kostak: ₹24,000

Key Market Updates

NTPC Green Energy has become a topic of interest in the grey market, even as its official launch is months away. Here’s what we know so far:

• Expected Price Band: ₹30-50
• Current GMP Range: ₹30-40
• Shareholder Quota: Investors holding 1 NTPC share by the tentative dates of October 10-20 will qualify for this IPO.

Disclaimer: Final dates, prices, and terms will be confirmed in the Red Herring Prospectus (RHP). Grey market activities are speculative and unregulated.

About NTPC Green Energy

NTPC Green Energy was incorporated in 2022 as a renewable energy-focused subsidiary of NTPC Limited, a ‘Maharatna’ central public sector enterprise. The company operates solar and wind power assets across multiple states in India.

Operational Capacity:

• Solar Projects: 3,071 MW
• Wind Projects: 100 MW (as of August 31, 2024)

NTPC Green Energy feeds the renewable power generated into the grid, supplying energy to government agencies and public utilities. The company has long-term Power Purchase Agreements (PPAs) or Letters of Award (LoAs) with multiple off-takers and aims to add around 60 GW of renewable capacity by 2032.

NTPC Green Energy IPO Financials and Use of Proceeds

• IPO Size: ₹10,000 crores
  • Fresh Issue: ₹10,000 crores
  • Offer for Sale (OFS): Not applicable

Utilisation of Proceeds:

• Debt Reduction of NTPC Renewable Energy: ₹7,500 crores (75%)
• General Corporate Purposes: ₹2,500 crores (25%)

Strengths of NTPC Green Energy

1. Top Renewable Energy Player: Among the top 10 in India based on operational capacity (as of June 2024).
2. NTPC Limited Backing: Strong promoter with extensive project execution experience and solid financial standing.
3. Diversified Renewable Portfolio: As of June 2024, the company had 14,696 MW of solar and wind projects, spread across geographies and off-takers.
4. Low Cost of Capital: Strong credit ratings and growing revenues enable low capital costs.
5. Largest Renewable Energy Public Sector Enterprise: The company leads in terms of operating capacity and power generation (excluding hydro projects).

Risks Associated with NTPC Green Energy

1. Project Delays and Cost Overruns: Renewable energy projects may face delays, which could impact financial performance.
2. Geographic Concentration: A significant portion of its projects are located in Rajasthan, making the company vulnerable to regional disruptions.
3. Receivables Collection: The company relies heavily on utility off-takers for revenue, and delays in collections could affect its financials.
4. Capital Expenditure Requirements: Significant funding will be required to meet capital expenditure, potentially affecting the company’s financial condition.
5. Revenue Concentration: In Fiscal 2024, over 87% of the company’s revenue came from the top five off-takers, with the largest contributing around 50%.

NTPC Green Energy’s IPO is poised to be one of the major listings of 2024, offering substantial opportunities for investors, especially in the renewable energy sector. However, potential investors should keep an eye on the final details and consider the associated risks before participating.

Tags: NTPC Green Energy IPO, NTPC Renewable Energy, Grey Market Premium, NTPC Green Energy IPO GMP, IPO 2024, Renewable Energy IPO, SEBI, NTPC Shareholder Quota