Tue Nov 19 10:37:49 UTC 2024: ## NTPC Green Energy IPO Opens to Strong Early Interest, Despite Valuation Concerns

**MUMBAI, INDIA – November 19, 2024** – NTPC Green Energy, the renewable energy arm of India’s largest power producer NTPC, launched its ₹10,000 crore initial public offering (IPO) today. The IPO, consisting entirely of new equity shares priced between ₹102 and ₹108, will run until November 22. The company secured ₹3,960 crore from anchor investors before the public offering.

Proceeds from the IPO, totaling ₹7,500 crore, will primarily be used to repay loans for subsidiary NTPC Renewable Energy Ltd. and for general corporate purposes. NTPC Green Energy, a “Maharatna” central public sector enterprise, operates solar and wind power plants across six Indian states. The NTPC group aims for 60 GW of renewable energy capacity by 2032, currently possessing 3.5 GW with over 28 GW under development. This includes a planned 1,200-acre green hydrogen hub in Andhra Pradesh, touted as India’s largest.

Early subscription data from the Bombay Stock Exchange (BSE) shows fluctuating levels of interest. While initial reports indicated low subscription levels (as low as 2% in the morning), the figures climbed throughout the day. By the end of the trading day, the IPO was reported to have been subscribed at approximately 31%. Retail investors showed relatively strong interest, with their portion oversubscribed, while non-institutional investors’ participation remained comparatively lower. The Qualified Institutional Buyers (QIB) portion was yet to be fully subscribed by the end of the day.

Despite the positive early interest, some analysts express concern over the IPO’s valuation. At the upper price band of ₹108, the valuation appears high to some, raising questions about the long-term prospects for investors. Analysts at Mehta Equities Ltd, for example, recommended the IPO only for risk-tolerant investors with a long-term outlook. Others highlighted the company’s reliance on a limited number of clients as a potential risk factor.

NTPC Green Energy’s revenue and profit have shown significant growth in recent years, with a 46.82% revenue increase and a 90.75% compound annual growth rate (CAGR) in profit after tax between fiscal years 2022 and 2024. The company aims to expand its presence in solar and wind energy, venturing into green hydrogen and other new energy solutions.

The grey market premium (GMP) stood at ₹0.70 on the first day, suggesting a potential listing price slightly above the upper IPO price band. However, investors are urged to conduct thorough due diligence and consult financial advisors before making investment decisions.

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