The much-anticipated NTPC Green Energy Limited (NGEL) IPO opened for subscription on November 19, 2024, and achieved a significant milestone by recording 55% retail subscription within the first 90 minutes. The IPO, which aims to raise ₹10,000 crore through a fresh issue of 9,259.25 lakh shares, is expected to remain open until November 22, 2024.

IPO Objectives and Utilization of Funds

The proceeds from the IPO will be allocated to:

1. Investment in NTPC Renewable Energy Ltd (NREL): ₹7,500 crore will be used for repayment or prepayment of outstanding borrowings.
2. General Corporate Purposes: A portion of the funds will support operational and corporate needs.

These initiatives align with NTPC’s broader mission to achieve a 60 GW renewable energy capacity by FY32 and bolster its position as a key player in India’s clean energy revolution.

IPO Details

• Price Band: ₹102 to ₹108 per equity share
• Market Capitalization: ₹90,999.99 crore (at the upper price band)
• Lot Size: 138 shares per lot
• Minimum Investment: ₹14,904 for retail investors; ₹2,08,656 for HNIs (14 lots)
• Listing Date: Expected on November 26, 2024, on BSE and NSE

Financial Performance and Valuation

NGEL has shown impressive growth in recent fiscal years:

• Revenue from Operations: ₹20,376.57 million (FY24) vs. ₹1,706.31 million (FY23)
• EBITDA: ₹17,464.70 million (FY24) vs. ₹1,513.81 million (FY23)
• Profit After Tax (PAT): ₹3,447.21 million (FY24) vs. ₹1,712.28 million (FY23)

However, the IPO’s valuation raises concerns:

• Pre-Issue P/E Ratio: 147.94x
• Post-Issue P/E Ratio: 270.00x
• Industry P/E Ratio: 153.44x

Given these metrics, analysts have flagged the IPO as fully priced, making it a less attractive option for listing gains or long-term investments.

Anchor Investors and Grey Market Premium (GMP)

The IPO raised ₹3,960 crore from anchor investors at the upper price band of ₹108 per share, allocating 36.67 crore shares. However, the Grey Market Premium (GMP) currently indicates 0% listing gains, reflecting subdued sentiment in the unorganized market.

Green Energy Initiatives

NGEL serves as NTPC’s umbrella company for green initiatives, focusing on:

• Ultra Mega Renewable Energy Power Parks (UMREPPs)
• Green Hydrogen Projects: Plans to manufacture electrolyzers
• Energy Storage Systems: Establishing facilities for lithium-ion advanced chemistry batteries

These initiatives are expected to position NTPC Green Energy as a premier player in India’s renewable energy landscape, with global ambitions.

IPO Subscription Status

As of 12:30 PM on Day 1, the overall subscription stood at 0.19 times, with retail participation driving early momentum.

Allotment and Listing

• Allotment Date: November 25, 2024
• Listing Date: November 26, 2024
  Investors can check allotment status online via the registrar’s portal by entering their application number or PAN details.

Analyst Recommendations

While NTPC Green Energy boasts a promising renewable energy portfolio, the IPO’s steep valuation and muted listing expectations suggest caution for investors seeking short-term gains. However, long-term investors aligned with the renewable energy sector may consider participating.

The Upcoming IPOs in this week and coming weeks are Lomosaic India, C2C Advanced System, Enviro Infra, Rajesh Power Services, Rajputana Biodiesel, Rosmerta Digital, Avanse Financial and Nisus Finance.

The Current active IPO is NTPC Green Energy.

For more insights into financial trends , visit our Top News Headlines. You can also explore investment opportunities in the market and apply for upcoming IPOs through our Best IPO to Apply Now section.