NTPC Green Energy shares list at 3% over IPO price

After receiving muted response for its ₹10,000 crore initial public offering (IPO), shares of state-owned NTPC Green Energy made a flat debut on domestic bourses on Wednesday, broadly in line with Street expectation. The renewable energy arm of NTPC debuted at ₹111.5 on the NSE, a premium of 3.2% over the initial public offering (IPO) of ₹108 apiece. On the BSE, the stock listed at ₹111.60, with a market capitalisation of ₹94,037 crore. Meanwhile, NTPC shares gained as much as 0.8% to ₹364.70 in the first hour of trade so far.

Ahead of listing, shares of NTPC Green Energy were trading at ₹109 in the grey market, commanding a GMP of ₹1 over the issue price. The GMP has seen downtrend in the last one week, dropping from its peak of ₹3.5 on November 23.

The IPO of NTPC Green Energy, which was completely fresh issue of equity shares, was subscribed 2.55 times on the final day of bidding, after receiving lukewarm responses on the first two days. The issue, which opened between November 19-22, was booked 0.36 times on Day 1, followed by 0.99 times subscription on Day 2.

As per the data available on the exchanges, the issue was subscribed 3.59 times in the retail category and 3.51 times in qualified institutional buyers (QIB) segment. The non-institutional Institutional Investors (NII) segment failed to get fully subscribed as it received 0.85 times bids in this category. The company had reserved 75% of the issue for QIB, 15% for NII, and remaining 10% for retail investors.

This was the third biggest IPO of the year, following Hyundai Motor India's ₹27,870 crore issue and Swiggy's ₹11,300 crore IPO. However, it was the largest in terms of fresh issue as the issue is complete issuance of new equity shares and there is no offer for sale (OFS) component. Also, it is the biggest IPO by a PSU since Life Insurance Corporation's ₹21,000-crore share sale in May 2022.

The company intends to use capital raised from IPO proceeds to invest in its wholly owned subsidiary, NTPC Renewable Energy, to repay its certain debts. A part of the fund will be used to meet general corporate purposes.

As per the document filed with the SEBI, the company intends to use 75% of the raised capital (₹7,500 crore) to clear debts availed by NTPC Renewable Energy Limited (NREL). As per the IPO document, NREL has entered into various borrowing arrangements, including borrowings in the form of term loans and various fund-based and non-fund based working capital facilities. As on July 31, 2024, the company had outstanding borrowings (fund based) of ₹16,235 crore on a consolidated basis.

NTPC Green Energy is the largest renewable energy public sector enterprise (excluding hydro) in terms of operating capacity as of June 30, 2024 and power generation in fiscal 2024, as per CRISIL report cited in the DRHP. The operational capacity was 3,071 MW of solar projects and 100 MW of wind projects with presence in more than six states.

As of June 30, 2024, the company’s portfolio consisted of 14,696 MWs, including 2,925 MWs of operating projects and 11,771 MWs of contracted and awarded projects. It had 15 offtakers, including government agencies and public utilities, across 37 solar projects and 9 wind projects.

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