NTPC Green Energy IPO Live: Pricing, GMP, and Subscription Details, Should i Apply ?

The much-anticipated NTPC Green Energy IPO officially opened for subscription today, November 19, 2024. This initial public offering aims to raise ₹10,000 crore, marking a significant milestone for the renewable energy sector in India. This article provides detailed insights into the IPO, including pricing, grey market premium (GMP), expert opinions, and whether investors should consider participating.

Key Details of the NTPC Green Energy IPO

• IPO Opening Date: November 19, 2024
• IPO Closing Date: November 22, 2024
• Price Band: ₹102 to ₹108 per share
• Lot Size: 138 shares
• Total Offering Size: ₹10,000 crore
• Expected Listing Date: November 27, 2024

Current Grey Market Premium (GMP)

As of today, NTPC Green Energy shares are trading at a grey market premium (GMP) of approximately ₹0.70, which translates to a 0.65% premium over the upper price band of ₹108. This modest GMP indicates a cautious optimism among investors regarding the IPO’s performance upon listing.

Subscription Status and Investor Interest

The IPO has already attracted significant attention from institutional investors, having raised ₹3,960 crore from anchor investors prior to its public launch. The allocation for various investor categories includes:

• 75% for Qualified Institutional Buyers (QIBs)
• 15% for Non-Institutional Investors (NIIs)
• 10% for Retail Investors

Retail investors can bid for a minimum of 138 shares, which translates to an investment of at least ₹14,904 at the upper price band.

Proceeds Utilization

The funds raised through this IPO will be utilized for several key purposes:

• Investment in its wholly-owned subsidiary, NTPC Renewable Energy
• Repayment or prepayment of existing debt
• General corporate purposes

Expert Opinions on the IPO

Financial analysts and brokerages have shared their insights on the potential of the NTPC Green Energy IPO:

1. Reliance Securities: Analysts recommend subscribing to the IPO due to NTPC Green Energy’s strong long-term growth potential and solid operational framework.
2. SBI Securities: They highlight the attractive pricing and project substantial growth in operational capacity from 3.3 GW as of September 2024 to 19 GW by FY27. They suggest that at the upper price band of ₹108, NTPC Green Energy is valued at an EV/EBITDA multiple of 53.4x, indicating solid growth prospects.
3. Anand Rathi: The brokerage emphasizes NTPC Green Energy’s leading position in renewable power generation and recommends a long-term subscription based on its ongoing expansion in hydroelectric projects and energy storage solutions.

Should You Buy NTPC Green Energy Shares?

Considering the current market conditions and expert opinions, here are some factors to consider before investing in the NTPC Green Energy IPO:

1. Strong Industry Position: As a subsidiary of NTPC Limited, one of India’s largest power generation companies, NTPC Green Energy is well-positioned to capitalize on the growing demand for renewable energy in India.
2. Growth Potential: Analysts project significant revenue growth with estimated compound annual growth rates (CAGRs) of approximately 79% for revenue and an impressive 123.8% for profit after tax over FY24-27.
3. Market Sentiment: The current GMP reflects cautious optimism; however, potential investors should monitor subscription levels closely as they may indicate broader market sentiment.

Conclusion

The NTPC Green Energy IPO represents a compelling opportunity for investors looking to enter the renewable energy sector. With strong institutional backing and a solid operational framework, this offering could be a worthwhile addition to your investment portfolio. However, as always, potential investors should conduct their due diligence and consider their risk tolerance before making investment decisions.