Blog

NTPC green is India’s largest renewable energy PSU in terms of operating capacity and power generation. NTPC Green Energy IPO is a book built issue of Rs 10,000.00 crores. The issue is entirely a fresh issue of 92.59 crore shares.

About NTPC Green Energy IPO:

• Company was incorporated on April 7, 2022.
• NTPC Green Energy is a wholly owned subsidiary of NTPC Ltd, which is a ‘Maharatna’ central public sector enterprise.
• The company is the largest renewable energy public sector enterprise (excluding hydro) in terms of operating capacity as of September 30, 2024, and power generation in FY2024.
• The company generates revenue by the sale of solar and wind power pursuant to Power Purchase Agreements to Indian government agencies and public utilities.
• The company’s renewable energy portfolio encompasses solar and wind power assets with an operational capacity of 3,220 MW of solar projects and 100 MW of wind projects across 6 states as of September 30, 2024.
• The company’s Portfolio consisted of 16,896 MWs including 3,320 MWs of operating projects and 13,576 MWs of contracted and awarded projects.  As of September 30, 2024, its Capacity under Pipeline together with its Portfolio consisted of 26,071 MWs.
• NTPC Green Energy has 17 offtakers across 41 solar projects and for 11 wind projects. Out of these, 9 offtakers were government agencies and public utilities with long-term PPAs of an average term of 25 years.
• As of September 30, 2024, the company is in the process of constructing 36 renewable energy projects in 6 states consisting of 13,576 MWs
• NTPC Green owned ~ 8,900 acres of freehold land and ~45,700 acres of leasehold land relating to its projects

• .

Financials :NTPC Green Energy IPO

Anchor: NTPC Green Energy IPO

Company has allotted 36.66 crore equity shares to 107 funds at ₹108 apiece which aggregates to ₹3,960 crore. Investors who participated include Goldman Sachs, Morgan Stanley, T Rowe Price, ADIA, Monetary Authority of Singapore, Government of Singapore, LIC and MFs like Nippon, Kotak etc.

Salient Points: NTPC Green Energy IPO

• The renewable energy sector in India is growing significantly. Globally, India ranks fourth in total renewable energy, wind as well as solar installations.
• Globally, India is ranked fourth in renewable energy capacity, including wind and solar installations.
• India is committed to achieve about 50% cumulative electric power installed capacity from non-fossil fuel-based sources by 2030.
• Largest Renewable Power co with 3,220 MW of solar projects and 100 MW of wind projects as of Sep’24.
• NTPC group aims to reach 60 GW of renewable energy capacity by 2032. Currently, it has 3.5 GW of installed capacity and over 28 GW in progress.
• Proceeds from the IPO to the tune of ₹7,500 crore will be used to repay or prepay part or all of its subsidiary NTPC Renewable Energy Ltd’s (NREL) outstanding loans and besides a portion will be utilized for general corporate purposes.

• NTPC Green is also investing in hydrogen, green chemical and battery storage capabilities and solutions as well as associated technologies.
  • NTPC Green has acquired land for India’s largest green hydrogen hub (of 1,100 TPD) in Andhra Pradesh. This includes developing battery storage, solar PV modules, electrolyzer and 2.7 GW round-the-clock RE projects.
  • It also plans a 10GW RE park in Maharashtra, 25 GW RE park in Rajasthan and a 1 million MT green hydrogen project in Rajasthan.
• The company had 2 subsidiaries: NTPC Renewable Energy (100% owned by Company) and Green Valley Renewable Energy (51% owned by Company and 49% by Damodar Valley Corporation. It also has one joint venture: Indian Oil NTPC Green Energy Private Limited (50% owned by Company and 50% owned by Indian Oil Corporation Limited).
• As of September 30, 2024, it had 17 offtakers across 41 solar projects and 11 wind projectseith many long term Power purchase agreements.
• Peers: NTPC Green’s IPO is priced higher than Adani Green on the basis of earning. Recently listed ACME Solar Holdings IPO quotes at a PE of 120x.
• Current debt equity ratio of 1.9:1.
• It has access to low cost of capital due to its parentage & being a govt. company.
• It’s revenues have grown at a 46% CAGR and Profit after tax has grown at 90% CAGR. It is poised for aggrassive growth in coming years due to large upcoming capacity.
• I am likely to skip NTPC Green Energy IPO or take a notional stake only. It has potential in the long run but at this point such aggressive pricing when secondary markets are under tremendous pressure makes it unattractive. There are instances of some Govt companies like IREDA pricing the issue at very reasonable valuations and there are instances in the past like NHPC IPO where it took over a decade for investors to cross the IPO price. NTPC Green is in the right sector and one can consider it from a long term view only due to aggressive growth projected in next few years.
• Such much-anticipated NTPC Green Energy IPO has lost its attraction due to aggressive pricing.
• GMP as reported on social media is quite low or NIL.
• This post is exploratory and educational purposes only.
• Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.