NTPC Green Energy IPO Subscribed 86% So Far On Day Two — Check GMP

The initial public offering of NTPC Green Energy Ltd. has been subscribed 86% on its second day of bidding on Thursday. It was booked 33% on its first day. The company will sell shares worth Rs 10,000 crore, entirely via a fresh issue of approximately 92.6 crore shares.

NTPC Green Energy IPO's grey market premium was Rs 0.40, as of 10:59 a.m., as per InvestorGain.

The IPO is India's third largest public issue this year after Hyundai Motor India Ltd. and Swiggy Ltd. The company raised Rs 3,960 crore from anchor investors a day before its initial public offering opened for bidding.

The price band is fixed between Rs 102 and Rs 108 per share. At the upper price band, the company is valued at a market capitalisation of Rs 91,000 crore.

Of the total IPO size, 75% is reserved for qualified institutional buyers, 15% for non-institutional investors, and the remaining 10% is to be allotted to retail individual investors. Retail investors can bid up to Rs 2 lakh in the offering. However, NTPC shareholders can participate in the shareholders' reservation portion, raising their bidding limit to Rs 4 lakh.

• Issue opens: Nov. 19.

• Issue closes: Nov. 21.

• Total offer size: Rs 10,000 crore.

• Fresh issue size: Rs 10,000 crore.

• Offer for sale size: Nil.

• Face value: Rs 5 apiece.

• Fixed price band: Rs 102–108 per share.

• Lot size: 138 shares.

• Listing: NSE, BSE.

NGEL plans to utilise 75% or Rs 7,500 crore of the IPO proceeds towards debt repayment. The company plans to repay debt worth Rs 4,000 crore in the current fiscal and Rs 3,500 crore in the next fiscal.

The balance 25% will be used for general corporate purposes.

NGEL is a wholly owned subsidiary of listed public sector undertaking NTPC Ltd.

Post the IPO, NTPC's stake in NGEL will reduce from 100% to 89.01%, while public shareholding will stand at 10.99%.

NGEL is NTPC Ltd.'s renewable energy arm, which was incorporated in 2022.

The company's total portfolio stands at 25.67 gigawatts, with an operational portfolio of 2.93 GW. Its contracted and awarded capacity stands at 14.7 GW and projects under pipeline stand at 10.98 GW. Its total portfolio consists of 20.32 GW of solar capacity and 5.35 GW of wind capacity.

As of financial year 2024, NGEL's market share, depending on how many bids it won, stood at 7%. This has declined from 18% in fiscal 2022, according to Morgan Stanley.

The company also plans to expand its portfolio and intends to install battery energy storage systems and hybrid contracts. It is also developing a green hydrogen hub in Andhra Pradesh.

NGEL's revenue in the first half of the fiscal stood at 51% of its top line in the last fiscal.

The management expects growth to come in as it commissions capacity. The company will be adding 3 GW of capacity to its 3.3 GW operational capacity in the fiscal. It then expects to commission 5 GW of capacity in fiscal 2026, 8 GW in fiscal 2027.

• The company derived more than 87% of its revenue from its top five offtakers in the fiscal. Its single-largest offtaker contributes around 50% to its revenue. Thus, loss of key customers can impact operations.

• The business' profitability is dependent on the availability and cost of solar modules, solar cells, wind turbine generators and other materials. Any supply disruption or volatility in prices can impact the business.

• Renewable energy project construction activities may be subject to cost overruns or delays.

• As of the first half of fiscal 2025, 62.20% of NGEL's operating renewable energy projects are concentrated in Rajasthan. Any significant social, political, economic or natural calamities in Rajasthan can have an adverse effect on the business.

The IPO was subscribed 0.86 times, or 86%, as of 2:00 p.m. on Thursday.

• Qualified institutional buyers: 0.74 times, or 74%.

• Non-institutional investors: 0.28 times, or 28%.

• Retail investors: 2.16 times.

• Portion reserved for employees: 0.34 times, or 34%.

• Portion reserved for shareholders: 0.90 times, or 90%.

NTPC Green Energy IPO's grey market premium was Rs 0.40, as of 10:59 a.m., as per InvestorGain. The estimated listing price was Rs 108.4, marking a premium of 0.37% from the upper price band of Rs 108.

GMP is not an official price quote for the stock and is based on speculation. 

Disclaimer: Investments in initial public offerings are subject to market risks. Please consult with financial advisors and read red herring prospectus thoroughly before placing bids.