NTPC Green Energy IPO - Should You Subscribe? Read Geojit's Analysis

Geojit Research Report

NTPC Green Energy Ltd. will launch its initial public offering on Nov. 19 and the offer closes for subscription on Nov. 24. Country's largest renewable energy public sector enterprise (excluding hydro) in terms of operating capacity has fixed the price band in the range of Rs 102 and Rs 108 per share. Minimum order lot for bidding is 138.

The Rs 10,000 crore IPO comprises entirely of a fresh issue of approximately 92.6 crore shares.

Object of the issue

• Repayment in full or in part, of certain outstanding borrowings availed by subsidiaries.

• General corporate purposes.

Strengths

• Strong parentage from NTPC Ltd., India’s largest power company.

• Deep domain expertise and diversified portfolio with long term PPA.

• 26 GW+ portfolio pipeline in solar and wind projects across geographies.

• Experienced team in renewable energy project procurement and execution.

Key Risks

• Delayed payments from discoms could hurts financials in short term.

• Significant competition from traditional and renewable energy companies.

Our View

NGEL benefits from NTPC’s financial strength and long-term relationships with off takers and suppliers, growing its revenues along with strong credit ratings that enable a low cost of debt executing large scale projects. NGEL has deep domain expertise of the management team focusing on new energy solutions like green hydrogen, green chemicals and storage with prudent growth and contributing towards fulfilling India’s net zero goals. We believe with a prudent business model and strong earnings growth with improved financials and return ratios, we recommend a Subscribe to the issue for the long term.

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