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Shares of NTPC Green Energy Ltd., NTPC Ltd.'s green energy arm, may see a neutral to flat listing, according to analysts. NTPC Green's IPO sailed through the tough waves in the market, led by retail investors who bought 3.59 times while the qualified institutional bidders (QIB) booked 3.51 times the allotted quota.
Considering all the parameters, along with decent subscription demand and prevailing market sentiments, the stock is expected to list at neutral to flat gain in the 0-5% range over its issue price, said Prashanth Tapse of Mehta Equities.
Tapse added that allotted investors should not expect any big listing gains given the current market scenario.
With ambitious renewable energy targets, the analyst believes that the company is well-equipped to capitalise on the increasing demand for sustainable energy solutions. NTPC Green's strategic expansion into green hydrogen, green chemicals and battery storage further enhances its growth prospects, positioning it at the forefront of India’s energy transition.
Shivani Nyati of Swastika Investmart expects a modest listing gain. "Given the long-term growth prospects in the renewable energy sector and NTPC Green Energy's strategic position, this IPO is recommended primarily for long-term investors. Short-term traders should remain cautious due to modest GMP signals and potential valuation concerns," she said.
Even the grey market premium (GMP) for the issue is hinting towards a flat listing for the investors. The company's shares currently have a GMP of ₹2, indicating a premium of 1.85% listing gains.
The company sold its shares in a fixed price band of ₹102-108 per share for its ₹10,000-crore IPO.
The IPO with a face value of ₹10 per equity share includes entirely of fresh equity shares, with no Offer For Sale (OFS) component.
Proceeds from the fresh issue to the extent of ₹7,500 crore will be used for investment in its wholly owned subsidiary, NTPC Renewable Energy Ltd. (NREL) for repayment, in full or in part of certain outstanding borrowings availed by NREL; and general corporate purposes.
This IPO ranks as the third largest of 2024, following Hyundai Motor India's ₹27,870 crore issue and Swiggy's ₹11,300 crore offering.
NTPC management is aiming for significant value unlocking through the listing of NTPC Green Energy, sources told CNBC-TV18 earlier.
In an interview with CNBC-TV18 earlier, Mohit Bhargava, CEO of NTPC Green Energy, had said that the primary reason for considering an IPO is the significant need for equity in the business.
"We will have to raise equity either through internal accruals or from the markets. So we feel that we will have to go to the market at some point of time."
NTPC Green Energy, a wholly owned subsidiary of NTPC is the largest renewable energy public sector enterprise (excluding hydro energy) in term of operating capacity as of September 24 and power generation as of March 2024. The company’s renewable energy portfolio includes both solar and wind power assets with presence across multiple locations in more than 6 states which helps in mitigating risk of location specific generation variability.
As of Sep’24, NTPC Green’s operational capacity stood at 3,220 MW of solar projects and 100 MW of wind projects across 6 states with average Power Purchasing Agreement (PPA) period of 25 years.
Further, it has 13,576 MW of contracted & awarded projects and capacity under pipeline of 9,175 MW as of Sep’24.
NTPC aims to achieve 60 gigawatts (GW) of renewable energy (RE) capacity by FY32. It currently has 3.5 GW of installed capacity and more than 28 GW under development.
IDBI Capital Markets & Securities, HDFC Bank, IIFL Securities, and Nuvama Wealth Management acted as the book-running lead managers for the issue.
Considering all the parameters, along with decent subscription demand and prevailing market sentiments, the stock is expected to list at neutral to flat gain in the 0-5% range over its issue price, said Prashanth Tapse of Mehta Equities.
Tapse added that allotted investors should not expect any big listing gains given the current market scenario.
With ambitious renewable energy targets, the analyst believes that the company is well-equipped to capitalise on the increasing demand for sustainable energy solutions. NTPC Green's strategic expansion into green hydrogen, green chemicals and battery storage further enhances its growth prospects, positioning it at the forefront of India’s energy transition.
Shivani Nyati of Swastika Investmart expects a modest listing gain. "Given the long-term growth prospects in the renewable energy sector and NTPC Green Energy's strategic position, this IPO is recommended primarily for long-term investors. Short-term traders should remain cautious due to modest GMP signals and potential valuation concerns," she said.
Even the grey market premium (GMP) for the issue is hinting towards a flat listing for the investors. The company's shares currently have a GMP of ₹2, indicating a premium of 1.85% listing gains.
The company sold its shares in a fixed price band of ₹102-108 per share for its ₹10,000-crore IPO.
The IPO with a face value of ₹10 per equity share includes entirely of fresh equity shares, with no Offer For Sale (OFS) component.
Proceeds from the fresh issue to the extent of ₹7,500 crore will be used for investment in its wholly owned subsidiary, NTPC Renewable Energy Ltd. (NREL) for repayment, in full or in part of certain outstanding borrowings availed by NREL; and general corporate purposes.
This IPO ranks as the third largest of 2024, following Hyundai Motor India's ₹27,870 crore issue and Swiggy's ₹11,300 crore offering.
NTPC management is aiming for significant value unlocking through the listing of NTPC Green Energy, sources told CNBC-TV18 earlier.
In an interview with CNBC-TV18 earlier, Mohit Bhargava, CEO of NTPC Green Energy, had said that the primary reason for considering an IPO is the significant need for equity in the business.
"We will have to raise equity either through internal accruals or from the markets. So we feel that we will have to go to the market at some point of time."
Business overview
NTPC Green Energy, a wholly owned subsidiary of NTPC is the largest renewable energy public sector enterprise (excluding hydro energy) in term of operating capacity as of September 24 and power generation as of March 2024. The company’s renewable energy portfolio includes both solar and wind power assets with presence across multiple locations in more than 6 states which helps in mitigating risk of location specific generation variability.
As of Sep’24, NTPC Green’s operational capacity stood at 3,220 MW of solar projects and 100 MW of wind projects across 6 states with average Power Purchasing Agreement (PPA) period of 25 years.
Further, it has 13,576 MW of contracted & awarded projects and capacity under pipeline of 9,175 MW as of Sep’24.
NTPC aims to achieve 60 gigawatts (GW) of renewable energy (RE) capacity by FY32. It currently has 3.5 GW of installed capacity and more than 28 GW under development.
IDBI Capital Markets & Securities, HDFC Bank, IIFL Securities, and Nuvama Wealth Management acted as the book-running lead managers for the issue.
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