NTPC Green Energy Ltd. (NGEL) is the umbrella company for the green energy initiatives of NTPC Limited. The company is on a mission to be a leading player in the renewable energy sector, with an ambitious target of 60 GW by FY 2032. NGEL is involved in a wide range of projects, including participation in Ultra Mega Renewable Energy Power Parks (UMREPP), aiming for sustainable growth. The IPO aims to raise ₹10,000 crores and opens from November 19 to November 22, 2024.

IPO Details

• Issue Type: Book Built Issue
• Subscription Period: November 19–22, 2024
• Lot Size: 138 shares
• Retail Investment Minimum: ₹14,904
• Listing: Shares will be listed on BSE and NSE on November 26, 2024.

At the upper price band of ₹108 per share, the company’s market capitalization will be ₹90,999.99 crores.

Company Overview

NTPC Green Energy Ltd. serves as a key player in NTPC's green energy journey, contributing to its expansion into renewable energy solutions. The company is spearheaded by two main promoters:

• PRESIDENT OF INDIA, acting through the Ministry of Power, Government of India
• NTPC Limited, one of India’s largest energy conglomerates.

Financial Performance

The company has seen strong growth in FY2024, with a significant increase in both revenue and profit after tax. The cash ROE for FY24 is 17.76%, reflecting efficient utilization of capital.

Subscription Status

• Final Subscription Period: The IPO opens for subscription on November 19, 2024.
• Allotment Date: The allotment status will be available on November 25, 2024.

Grey Market Premium (GMP)

The GMP for the NTPC Green Energy IPO is ₹0, suggesting no potential listing gains based on market sentiment. This could indicate limited enthusiasm in the informal market, which may not reflect the actual price discovery at listing.

Objectives of the IPO

The proceeds from the Fresh Issue will be utilized as follows:

1. ₹75,000 Million for investments in NTPC Renewable Energy Ltd. (NREL) for repayment of outstanding borrowings.
2. General corporate purposes.

IPO Valuation & Review

For the NTPC Green Energy IPO:

• Pre-Issue EPS: ₹0.73
• Post-Issue EPS: ₹0.40
• Pre-Issue P/E ratio: 147.94x
• Post-Issue P/E ratio: 270.00x
• Industry P/E: 153.44x

The valuation of the IPO suggests that it is fully priced relative to its earnings, with a high P/E ratio compared to industry peers. Although the company’s growth in green energy is promising, the high valuation may limit potential gains for investors looking for immediate listing profits.

Conclusion

While NTPC Green Energy's strategic focus on renewable energy and its strong backing by NTPC make it an essential player in the sector, the high valuation and lack of GMP suggest that investors may want to approach this IPO cautiously. The IPO appears priced for long-term growth, but listing gains and short-term investment may not be highly profitable. Investors should assess their risk tolerance and investment horizon before considering this IPO.

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

The Current active IPO are Zinka Logistics Solution (Black Buck), and Onyx Biotec.

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.