Tepid Listing for NTPC Green Energy: 3% Premium on Stock Exchanges
Days after closure of NTPC Green Energy Ltd.’s IPO, the company’s stock exhibited a rather muted listing on the exchanges on 27th November 2024. While the company’s shares were listed at a 3.24% premium on the National Stock Exchange (NSE) at Rs. 111.50 apiece, they were listed at a 3.33% premium on the Bombay Stock Exchange (BSE) at Rs. 111.60 apiece.
After a lukewarm listing on the stock exchanges, NTPC Green Energy’s shares hit the 10% upper circuit on 27th November 2024 to reach Rs. 122.65 apiece on NSE and Rs. 122.75 apiece on BSE.
About NTPC Green Energy
NTPC Green Energy Ltd. was incorporated on 7th April 2022 as a subsidiary of NTPC. Soon after, through a Business Transfer Agreement, 15 Renewable Energy assets (generation units) of NTPC were transferred to NTPC Green Energy on 28th February 2023.
As of now, NTPC Green Energy is India’s largest Renewable Energy (excluding hydro power) public sector enterprise. The company’s portfolio comprises 3,220 MW of operational solar power projects and 100 MW of operational wind power projects as of Q2 FY-25. Other than these operational projects NTPC Green Energy’s portfolio comprises 13,576 MW of contracted and awarded projects, and 9,175 MW of projects ‘in pipeline’, for which MoUs have been signed but definitive agreements have not been signed yet.
Biggest Public Sector IPO since LIC
NTPC Green Energy’s Rs. 10,000 crore issue was India’s biggest IPO since Life Insurance Corporation of India’s (LIC) Rs. 21,000 crore IPO in May, 2022. In 2024, NTPC Green’s issue has been the 4th largest so far.
Proceeds to be Used for Debt Payment, General Corporate Purposes
In its Red Herring Prospectus (RHP), NTPC Green Energy had mentioned that the proceeds from its IPO will partly be utilised to pay debts taken by its subsidiary, namely NTPC Renewable Energy Ltd. (NREL). Out of the Rs. 10,000 crore raised, NTPC Green Energy will use about Rs. 7,500 crore for this purpose. The remaining amount, that is about Rs. 2,500 crore will be used for general corporate purposes.
Details About NTPC Green Energy’s IPO
Shares of NTPC Green Energy, a 100% subsidiary of Indian Power sector major NTPC Ltd., were open to subscription from 19th November to 22nd November 2024. Issue size for this IPO was Rs. 10,000 crore, which comprised entirely of fresh shares (92.59 crore shares). These shares were offered in a price band from Rs. 102 to Rs. 108 apiece, and the minimum lot size was defined as 138 shares (amounting to Rs. 14,904). Face value of these shares was Rs. 10 apiece.
Allocation of NTPC Green’s Shares among Investors
Out of the total issue, 26.37% of the shares were offered to Qualified Institutional Buyers (QIBs), 13.19% of the shares were offered to Non-Institutional Investors (NIIs), 8.79% of the total were offered to retail investors, whereas 2.1% of the shares were open for the company’s employees to purchase. Apart from this 36.66% of the shares, which amount to Rs. 3,960 crore, were open for anchor investors, whereas 9.99% of the shares issued were open to other investors.
Interestingly, major anchor investors in NTPC Green Energy IPO include Life Insurance Corp. of India (LIC), Goldman Sachs India Equity Portfolio, and Government of Singapore.