The much-anticipated initial public offering (IPO) of NTPC Green Energy Limited, the renewable energy arm of India’s power giant NTPC, opens up for subscription today, November 19, 2024. Plans to raise Rs 10,000 crore is an important step for India in the transition to more renewable energy. The subscription window will remain open until November 22, 2024, with a price band between Rs 102 and Rs 108 per share. Retail investors can participate with a minimum application of 138 shares, amounting to an investment of Rs 14,904.
NTPC Green IPO: Market Opportunity
NTPC Green Energy is a wholly-owned subsidiary of NTPC Limited, with 16,896 MW of solar and wind projects spread across six states. It stands strategically well-positioned to capture the tremendous potential in the sector, with India emerging as one of the world’s fastest-growing renewable energy markets.
In FY24, NTPC Green Energy reported a revenue surge to Rs 2,037.66 crore, up from Rs170.63 crore in FY23, with a net profit increase from Rs 171.23 crore to Rs 344.72 crore. The first half of FY25 continued this growth trajectory, with a net profit of Rs 175.30 crore on a revenue of Rs 1,132.74 crore. Analysts praise the company for its good project pipeline and management and excellent credit ratings, making this a promising long-term investment aside from its rather high price-to-earnings ratio of 257.14.
India’s renewable energy capacity, at 63 GW back in 2012, has exponentially grown to 201 GW as of September 2024, mainly driven by solar power installations. NTPC Green Energy plays a pivotal role in this growth, aligning with India’s COP26 climate commitments to reduce emissions intensity by 45% by 2030 and achieve net-zero emissions by 2070.
Government Support And Expansion Plans
The government’s focus on renewable energy through incentives and reforms creates a favorable environment for NTPC Green Energy. As a government-backed enterprise, the company is well-positioned to benefit from these initiatives, ensuring its projects remain immune to international policy fluctuations.
The company plans to use the IPO proceeds to fund investments in its wholly-owned subsidiary, NTPC Renewable Energy Limited, repay or prepay certain outstanding borrowings, and meet general corporate expenses. This financial strategy strengthens its ability to expand its operations and contribute significantly to India’s clean energy goals.
Positive Sentiment In The Grey Market
NTPC Green Energy shares are trading on the grey market with a premium of Rs 0.70 in anticipation of the company’s listing. The shares allotment will take place on November 25, 2024, after which the shares will be credited to the subscribers’ demat accounts by November 26, 2024. The listing on BSE and NSE is scheduled for November 27, 2024.
Why Should You Subscribe?
Market experts and brokerages such as Reliance Securities, SBI Securities, and Swastika Investment recommend subscribing to the IPO. The company’s growth in financials, strategic role in the renewable energy landscape of India, and government support make it a very good investment opportunity. Analysts also focus on the increase in demand for renewable energy, which is expected to grow at a compound annual growth rate of 5.5% from FY24-FY29. However, we recommend doing your study before making any investments.
NTPC Green Energy: Investing In India’s Renewable Future
NTPC Green Energy’s IPO would allow investors to join India’s renewable energy revolution. The company is well-positioned due to superior financial performance, government support, and an excellent market opportunity, and it will play an important role in taking India toward its stable future. Therefore, investors looking for long-term growth may consider subscribing to this IPO.
Furthermore, the company’s strategic focus on expanding its renewable energy portfolio has led it to become a clean energy leader. Through investments in NTPC Green Energy, shareholders reap potential financial returns, but they also contribute to crucial climate goals for India to reduce carbon emissions and substantially increase reliance on non-fossil fuel energy sources. This dual benefit makes the IPO attractive for socially responsible and growth-focused investors.
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