NTPC Green Energy Limited (NGEL) is poised to become a prominent player in India's renewable energy sector. As an umbrella company for NTPC's green energy initiatives, NGEL is dedicated to helping NTPC achieve its ambitious target of 60 GW of renewable energy capacity by FY 2032. This makes the NTPC Green Energy IPO one of the most anticipated offerings in 2024.

What is NTPC Green Energy IPO?

The NTPC Green Energy IPO is a fresh issue of 9,259.25 lakh shares, with a price band of ₹102 to ₹108 per share. The subscription period for the IPO begins on November 19, 2024, and closes on November 22, 2024. The IPO will be listed on the BSE and NSE, with a tentative listing date set for November 27, 2024. The market capitalization of the company at the upper price band is estimated at ₹90,999.99 crores, which places the company among India's leading players in the green energy space.

Investors can bid for a minimum lot size of 138 shares, with retail investors needing to invest a minimum of ₹14,904. High-Net-Worth Individuals (HNIs) must bid for at least 14 lots, or 1,932 shares, with a total investment of ₹2,08,656.

The Current active IPO is Rajputana Biodiesel, Rajesh Power Services, C2C Advanced System, Enviro Infra Engineers and Lomosaic India.

Financial Metrics and IPO Valuation

The NTPC Green Energy IPO is priced at a pre-issue P/E ratio of 147.94x and a post-issue P/E ratio of 270.00x, which is higher than the industry P/E of 153.44x. For the fiscal year 2024, the company reported a revenue of ₹20,376.57 million and an EBITDA of ₹17,464.70 million, indicating strong growth potential in the renewable energy sector. The company’s Profit After Tax (PAT) for FY 2024 was ₹3,447.21 million, compared to ₹1,712.28 million in FY 2023, showcasing impressive year-on-year growth.

The Grey Market Premium (GMP) for the NTPC Green Energy IPO is currently estimated to be ₹0, reflecting neutral market sentiment. However, this metric should not be heavily relied upon, as GMP is a non-regulated market and can fluctuate.

Key Objectives of the IPO Proceeds

The proceeds from this IPO will be used primarily for investment in NTPC Renewable Energy Limited (NREL), NTPC's wholly owned subsidiary. A significant portion of the funds, approximately ₹75,000 million, will go towards repaying outstanding borrowings, further enhancing the company’s financial position. Additionally, the company plans to allocate funds for general corporate purposes, facilitating expansion and investment in future renewable energy projects.

Is the NTPC Green Energy IPO a Good Investment?

While the company has shown strong financial growth, the high P/E ratio suggests that the IPO is fully priced. This means investors may not see immediate listing gains. Furthermore, the GMP of ₹0 indicates a neutral market sentiment toward the IPO. If you're looking for long-term investment opportunities in the growing renewable energy sector, NTPC Green Energy offers a potential growth story but may not provide substantial listing gains.

In conclusion, the NTPC Green Energy IPO offers an opportunity to invest in one of India's largest green energy players. However, with premium pricing and neutral market sentiment, investors should carefully evaluate their investment goals before applying for the IPO.

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