Wed Nov 20 16:17:52 UTC 2024: ## NTPC Green Energy IPO Oversubscribed Despite Lackluster Grey Market Premium

**MUMBAI** – NTPC Green Energy’s Initial Public Offering (IPO) opened on November 19th and was fully subscribed by retail investors within hours of its launch. While this demonstrates significant retail interest, the IPO’s grey market premium (GMP) remains relatively low, sparking debate about its pricing.

The company, a subsidiary of NTPC, reported strong financial performance, with a 101% year-on-year increase in net profit to Rs 344.72 crore in FY24 and an over 11-fold increase in revenue. Operating and net profit margins remained consistent with three-year averages at 89% and 20%, respectively. Analysts attribute this success to effective execution and economies of scale. The company benefits from a diversified portfolio, long-term power purchasing agreements (PPAs), and is well-positioned to contribute to NTPC’s renewable energy targets.

Despite the positive financial performance and favourable industry outlook – projected 5.5-6.0% growth in India’s energy demand over the next five years – some analysts, like Bajaj Broking and Anand Rathi Research, believe the IPO is aggressively priced based on projected FY25 earnings, labeling it a “long-term story.” While the retail portion saw overwhelming demand, the institutional investor (NII) participation remained relatively subdued. The strong retail interest may be driven by the positive industry trends and the company’s strong fundamentals despite pricing concerns.

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