State-run NTPC Ltd.'s green energy arm, NTPC Green Energy Ltd., filed its initial public offering's draft red herring prospectus on Wednesday. The company plans to raise Rs 10,000 crore.
As per NDTV Profit's calculations, this company could have market capitalisation of around Rs 75,000 crore.
Peer Comparison
As per NTPC Green's draft red herring prospectus, the company's two direct listed peers in India are Adani Green Energy Ltd. and US listed ReNew Energy Global Plc. Both these company's fiscal 2024 revenues stood in the range of Rs 8,100-9,200 crore, while NTPC Green's revenues stood at over Rs 1,900 crore.
As per Bloomberg, the current enterprise value to Ebitda multiple of Adani Green Energy and ReNew Energy Global stand at 50.94 and 13.73, respectively.
In order to calculate NTPC Green Energy's estimated market capitalisation, we have taken the average multiple of these two listed peers, which is 32.34.
Estimated FY25 Financials
NTPC Green Energy's revenue from operations stood at Rs 650 crore in the first quarter of fiscal 2025. Assuming this quarterly run rate, NTPC Green could have estimated revenues of around Rs 2,600 crore in fiscal 2025.
If the company is able to maintain its 88% fiscal 2024 margins, NTPC Green Energy's fiscal 2025 Ebitda is estimated to stand at Rs 2,313.68 crore.
Based on the above financial estimates and the average EV/Ebitda multiple of its peers, NTPC Green could have a market capitalisation of Rs 74,812.74 crore, as per NDTV Profit calculations.
Equity Dilution
While NTPC Green Energy's draft red herring prospectus does reveal that the company plans to raise Rs 10,000 crore via the initial public offering, it does not state how much of the company's 750 crore equity shares it would be diluting for the offering.
Based on the estimated market capitalisation and the offer size, NTPC Green could dilute around 13.37%, or 100 crore equity shares in its initial public offering.
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