NTPC Green Energy Ltd IPO: 10 Key Things to Know Before Investing 

NTPC Green Energy Ltd, a wholly owned subsidiary of NTPC Ltd and a prominent player in India’s renewable energy sector, is launching its Initial Public Offering (IPO) on November 19, 2024. This IPO, aiming to raise ₹10,000 crore through a fresh issue, presents a unique opportunity for investors to tap into India’s growing green energy landscape.  

What makes NTPC Green Energy company a good opportunity?

 India has committed to reducing the carbon intensity of its economy by at least 45% by the end of this decade. By 2030, the country aims to have 50% of its cumulative electric power capacity come from renewable sources and to achieve a total of 500 GW of renewable energy installed capacity. Additionally, India has set a goal to reach net-zero carbon emissions by 2070. 

 The IPO of NTPC Green Energy offers an entry point into India’s fast-growing renewable energy market. Supported by government initiatives, an extensive project portfolio, and increasing demand for sustainable energy, NTPC Green is poised for significant growth. 

What are the IPO Dates, Price Band, and Issue Size? 

Here is the critical information regarding the NTPC Green Energy Ltd IPO: 

•  IPO Dates: November 19th 22nd, 2024 

•  Face Value: ₹10 per share 

•  Price Band: ₹102 – ₹108 per share 

•  Total Issue Size: ₹10,000 Crore 

•  Listing Exchange: BSE, NSE 

• Book Running Lead Managers: IDBI Capital Market Services, HDFC Bank, IIFL Securities and Nuvama Wealth Management 

What is the Minimum Investment for NTPC Green Energy Ltd IPO? 

The lot size for this IPO is 138 shares, so the minimum investment required is ₹14,076 (138 shares at the lower price band of ₹102). 

What Does the Company Do? 

NTPC Green Energy Ltd is India’s largest public renewable energy enterprise (excluding hydro) in terms of operating capacity and power generation as of FY24. The company currently has 3,320 MW of solar projects and 100 MW of wind projects operational across six states.  

 With a pipeline and awarded projects totaling 13,576 MW, NTPC Green Energy Ltd has a large, diversified portfolio that reduces location specific risks and ensures energy availability. The company strategically focuses on utility scale renewable projects and partnerships with Indian corporates and PSUs to drive growth in India’s green energy sector. 

What is the NTPC Green Energy IPO Objective? 

The proceeds from this IPO are planned for: 

• Investment in the wholly owned subsidiary, NTPC Renewable Energy Limited (NREL), to repay or prepay certain outstanding borrowings. 

• General corporate purposes. 

How Much is the IPO Reservation for Retail and Other Investors? 

The IPO allocation is divided among different investor categories as per regulatory requirements. 

What are the Key Strengths and Potential Risks of Investing in NTPC Green Energy Ltd IPO? 

IPO Strengths 

• Backed by NTPC Ltd: NTPC Green Energy Ltd benefits from the support of NTPC Ltd, known for its expertise in managing large-scale projects, reliable relationships with suppliers and offtakers, and financial strength. 

• Top Renewable Energy Player: As of September 2024, the company ranks among the top 10 renewable energy players in India based on operational capacity. 

• Diversified Renewable Portfolio: With 19,896 MW in solar and wind projects, NTPC Green Energy Ltd has a diversified presence across various geographies and offtakers, which helps mitigate risks associated with location-specific energy generation. 

• Experienced Management: The company has a skilled management team specializing in renewable energy project execution, procurement, and operations. 

IPO Risks 

• Customer Concentration: The company relies on a concentrated pool of utilities and power purchasers, with over 87% of its FY24 revenue coming from its top five offtakers. Notably, the single largest offtaker accounted for around 50% of revenue in FY24. Losing a major customer or seeing their financial condition decline could impact the company’s performance.
  
• Supply Chain Dependency: NTPC Green Energy Ltd’s operations heavily depend on third-party suppliers for critical materials and equipment. In FY24, the top 10 suppliers accounted for 92.65% of supplies. Any disruptions or price volatility in these supplies could adversely affect the company’s financial health.
  
• Project Execution Risks: Renewable energy project construction often encounters delays or cost overruns, which could affect financial performance. The company’s growth also relies on the successful execution of contracted and awarded projects, and any inability to deliver on these could impact its business outlook.
  

Can You Share the Financial Performance of NTPC Green Energy Ltd? 

NTPC Green Energy Ltd has shown steady financial growth. Here’s a look at their recent financials: 

What is the Allotment Date of NTPC Green Energy Ltd IPO? 

The allotment date is scheduled for November 25, 2024. Investors can check the allotment status on the registrar’s website. 

Should You Invest in NTPC Green Energy Ltd IPO? 

NTPC Green Energy Ltd.’s growth potential, anchored by NTPC’s strong backing and focus on renewable projects, positions it favorably within India’s renewable sector. However, investor caution is advised, especially regarding its dependence on a concentrated client base and supply chain risks.