NTPC Green IPO Listing Highlights: Stock ends 9% higher on listing day, PSU eyes capacity expansion over 3 years

After listing a premium of 3% on November 27, the NTPC Green Energy stock rallied during the day and ended 8.74% higher at ₹121.25 on NSE.

By the end of the trading session, the company’s market capitalisation stood at ₹1,02,169.25.

Hours after a subdued listing,  NTPC Green Energy’s market capitalisation rose to ₹1,03,247.82. The stock traded 9.89% higher at ₹122.53 on NSE as of 2:22 pm.

After more than three hours of listing in which NTPC Green made a debut at 3% premium to issue price, the stock is now up 10% trading at ₹122.32 on NSE at 1:20 pm.

NTPC Green CMD Gurdeep Singh said, “We have already declared that we will reach 60 gigawatts, meaning 60,000 megawatt, by 2032 and this whole money (raised in the fresh issue), mostly will be required to be invested in the capex.”

NTPC Green CMD Gurdeep Singh on November 27 shared that the company has more than 13,000 to 16,000 megawatts of solar projects plus wind projects that under execution.

“We are going to commission 3,000 megawatt by March 2025, another 5,000 megawatt by March 2026 and another 8,000 megawatts by March 2027. So, by FY27, we should be reaching 19,000 megawatt of commission capacity,” he told CNBC-TV18 on the listing day.

In an exclusive interview with CNBC-TV18, NTPC and NTPC Green Energy CMD Gurdeep Singh said, the firm has raised ₹10,000 crore, but its growth plans are intact, and mostly it will utilise the money to fund new projects, and for their capex requirement.

Nirgunan Tiruchelvam, an analyst at Aletheia Capital in Singapore told Bloomberg News that the NTPC Green IPO shows that despite the overhang of the Adani controversy and any volatility in the Indian market there continues to be a strong appetite for Indian IPOs.

Proceeds from the NTPC Green IPO will be used to repay or prepay part or all of its subsidiary NTPC Renewable Energy Ltd’s (NREL) outstanding loans, and a portion will be utilised for general corporate purposes.

NTPC Green Energy is a ‘Maharatna’ central public sector enterprise with a renewable energy portfolio, including solar and wind power assets.

The shares of NTPC Green retreated from the day’s high of ₹122.65 to trade 8% higher from the opening price ₹120.42 on NSE. 

The uptrend in the stock comes despite a subdued listing at 3% premium.

According to Shivani Nyati of Swastika Investmart, NTPC Green Energy’s sharp surge post-listing, elevating its valuation from $10.8 billion to over $12.08 billion, is driven by strong investor sentiment toward the renewable energy sector.

The company’s robust and diversified portfolio, consistent revenue growth, and strategic importance as an NTPC subsidiary have led to a positive market revaluation. Improved market conditions, optimism around India’s renewable energy ambitions, and institutional investor confidence are further fueling this rally.

Deven Choksey, MD, DR Choksey Finserv, told CNBC-TV18 that it is going to be a game where the larger part of the revenue and profits could increase year-over-year (YoY) on a systematic basis for next six to eight years. From that perspective, investment looks absolutely favorable and to be considered in the portfolio, he said.

“However, most of the retail investors, or the people who are basically flipping the IPOs, they may not be very excited about this particular story, largely because of the fact that the eventual growth is coming up over a period of time being an infrastructure company, and that’s why many short-term minded investors will not probably be interested”

Choksey added that it is a good opportunity for the long-term orientation and investment must be made to the portfolio keeping in mind this perspective.

The stock of NTPC Green Energy Ltd. surged as much as 14% on Wednesday, after it made a modest stock market debut. This public offer ranks as the third largest of 2024, following Hyundai Motor India’s ₹27,870 crore issue and Swiggy’s ₹11,300 crore offering.

Prashanth Tapse of Mehta Equities said that valuations and subdued market mood justifies NTPC Green Energy’s listing. For long term investors, he believes the company is a great opportunity to invest in a leading player of India’s renewable energy sector, backed by the formidable resources and expertise of NTPC Ltd as a long term strategy only.

According to Shivani Nyati, Head of Wealth at Swastika Investmart, NTPC Green’s listing surpassed modest expectations, supported by slightly improved market sentiment.

“As a wholly-owned subsidiary of NTPC Ltd., the company benefits from a robust and diversified portfolio across geographies and off-takers. Its consistent top-line growth is encouraging, though temporary fluctuations in profitability and margins remain a concern. Despite the aggressive pricing based on the PE ratio, the company’s long-term prospects in the renewable energy space make it a suitable option for patient investors with a long-term horizon,” she said while recommending investors to hold it with a stop loss at around 110.

The shares of NTPC Green Energy Ltd. debuted on the exchanges with a premium of over 3% on Wednesday, November 27. The company’s shares listed at ₹111.50 on the NSE. Meanwhile, its shares listed at 3.33% premium at ₹111.60 on the BSE. Read full report here

NTPC Green Energy’s IPO is all set to debut on bourses shortly. Those who have received the allotment will be able to see their returns when trading begins at 10 am today. However, as per the current GMP, a muted listing is expected.

Shares of NTPC Green Energy Ltd. are trading at ₹108 apiece in pre-open on BSE today.

Shares of NTPC Green Energy Ltd. will be listed on the bourses on Wednesday. The allotment of shares was finalised on November 25, while refund will be initiated on November 26. The shares to the allottees will be credited on the same date.

Mahesh M Ojha of Hensex Securities said that NTPC Green Energy IPO was purely a long term story. He advised investors to book partial profits if 8-10% gains are seen, but long term investors can hold it for a long period.

Mehta Equities’ Prashanth Tapse recommended long-term investors to hold the stock despite knowing short-term volatility in the markets and competitive pressures in the sector. For non-allotted investors, he advised to accumulate if the listing is around the issue price.

Analysts at multiple brokerage firms had mostly had a positive view on the NTPC Green Energy IPO but suggested it for a long-term subscription only.

IDBI Capital Markets & Securities, HDFC Bank, IIFL Securities, and Nuvama Wealth Management acted as the book-running lead managers for the issue.

As of September 2024, 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.

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.

NTPC Green has shown robust financial growth, with the company’s revenue growing at a compound annual growth rate (CAGR) of 46.82% from FY22 to FY24, reaching ₹1,963 crore. The profit after tax (PAT) margin for FY24 stood at 17.56%, while the return on equity (RoE) came in at 17.76%.

NTPC management is aiming for significant value unlocking through the listing of NTPC Green Energy, sources have CNBC-TV18 earlier.

In an interview with CNBC-TV18 earlier, Mohit Bhargava, the 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.”

The net 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.

Manish Chowdhury of StoxBox anticipates a stable listing, with NTPC Green shares likely to open about 3% higher over the upper end of the price band. “Considering its strong financials and strategic growth, investors who received allotments should look to hold the stock for medium to long-term growth,” he said.

Ahead of the listing, shares of NTPC Green were commanding a grey market premium (GMP) of ₹1. The muted trends from the unofficial market suggested towards a dull listing for the investors later today.

Ahead of its debut on D-Street, NTPC Green Energy has set up a 50:50 joint venture with Maharashtra State Power Generation Company Ltd., to develop, operate and maintain renewable energy parks in the state.

NTPC Green Energy’s IPO sailed through the tough waves in the market, led by retail investors who bought 3.44 times. The allocation for Qualified Institutional Bidders was oversubscribed by 3.32 times, while the Non-Institutional Investors’ portion was undersubscribed, at 81%.