NTPC Green Energy Files Draft Papers For Rs 10,000-Crore IPO

NTPC Green Energy Ltd., an arm of the state-run NTPC Ltd., on Wednesday filed the draft red herring prospectus for an initial public offering to raise Rs 10,000 crore.

The IPO will comprise an entirely fresh issue with no offer-for-sale component, the draft papers noted.

The issue is being launched at a time when India is looking to ramp up its renewable energy sector. The government has set a target to increase renewables capacity to 500 GW by 2030, from around 200 GW at present.

The offer will generate significant interest among investors as green energy will remain in focus in the near term, said Kranthi Bathini, director of equity strategy at WealthMills Securities.

The IPO also comes at a time when NTPC is looking to diversify its earnings by exploring other energy avenues, he added.

IDBI Capital Markets & Securities, HDFC Bank, IIFL Securities, and Nuvama Wealth Management will be the book-running lead managers for the issue, according to the DRHP.

In the draft red herring prospectus filed with SEBI, the company said it will use the proceeds for the repayment of debt and general corporate purposes.

NTPC Green will deploy Rs 4000 crore in the fiscal 2024-25 towards repayment or prepayment of outstanding borrowings availed by its subsidiary, NTPC Renewable Energy Ltd, and another Rs 3,500 crore in the financial year-ending March 2026, it said.

Post-repayment/prepayment of the loans, NTPC Greens’ total loans on a consolidated basis will come down to Rs 8,735.1 crore.

Around 25% of the proceeds will be used towards general corporate purposes, including growth opportunities, strategic initiatives, partnerships, joint ventures and acquisitions, capital expenditures, and other business development initiatives, among others.

In April-June quarter, NTPC Green’s net profit was Rs 138.6 crore on total revenue from operations of Rs 578.4 crore, and in FY24, net profit was Rs 344.7 crore on revenue from operations of Rs 1962.6 crore.

NTPC Greens’ renewable energy capacity, including NTPC and NTPC Renewable Energy, stands at 3.34 GW of solar and 0.21 GW of wind. While 8.13 GW is under construction, the company has a pipeline of 10.57 GW of renewable capacity.

Notably, India's IPO market has been buzzing with around 235 companies raising in excess of Rs 71,000 crore in this year so far. The Nifty 50, which is the benchmark equity index, has climbed to record highs more than 50 times in 2024.

On Wednesday, NTPC shares settled 0.52% lower at Rs 414.5 on the NSE, as compared to a 0.16% decline in the benchmark Nifty 50. The stock has returned 33% so far this year.