The NTPC Green Energy IPO is entirely a fresh issuance of equity shares with no offer-for-sale (OFS) component, according to the draft red herring prospectus (DRHP).
NTPC Green Energy, the renewable energy arm of NTPC, has filed draft papers with capital markets regulator Sebi to raise Rs 10,000 crore through an initial public offering (IPO). The IPO is entirely a fresh issuance of equity shares with no offer-for-sale (OFS) component, according to the draft red herring prospectus (DRHP).
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The renewable energy firm said proceeds of the issue to the tune of Rs 7,500 crore will be used to repay or prepay part or all of its subsidiary NTPC Renewable Energy Ltd’s (NREL) outstanding loans, while a portion will be utilised for general corporate purposes.
The filing comes at a time when the country’s IPO market is thriving, with around 60 main board companies having launched their initial share-sales this year so far.
NTPC Green Energy IPO: Opening Date
In an interview with CNBC-TV18, NTPC’s management has earlier said that the company plans to list the renewable energy business by the end of the calendar year 2024. The official dates will be declared soon.
The NTPC Green Energy IPO will also have a shareholders quota. So, those who have shares of NTPC as of the date of RHP, which will be filed later, can participate in the shareholders category in the IPO.
NTPC Green Energy: A ‘Maharatna’ PSU
NTPC Green Energy is a ‘Maharatna’ central public sector enterprise with renewable energy portfolio, including solar and wind power assets spread across more than six states.
As of August 2024, the company’s operational capacity comprised 3,071 MW from solar projects and 100 MW from wind projects, across six states.
Overall, the NTPC group aims to reach 60 GW of renewable energy capacity by 2032. Currently, it has 3.5 GW of installed capacity and over 28 GW in progress.
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India’s Renewable Energy Situation
India’s renewable energy sector is growing rapidly. Globally, India is ranked fourth in renewable energy capacity, including wind and solar installations, the draft papers said, citing a Crisil report.
The country’s installed renewable energy capacity increased from 63 GW in FY12 to 123 GW in FY21, reaching about 191 GW by March 2024 (including large hydro). As of March 2024, renewable energy made up nearly 43 per cent of India’s total power generation capacity, with solar energy leading this growth, it added.
IDBI Capital Markets & Securities, HDFC Bank, IIFL Securities, and Nuvama Wealth Management are the book-running lead managers to the issue.
NTPC Green Energy IPO: Expertspeak
“The IPO comes at a time when thermal power-heavy NTPC is looking for other energy avenues to diversify into and bolster revenues,” Kranthi Bathini, director of equity strategy at WealthMills Securities said, according to Reuters.
“Considering the fact that green energy will remain in focus in the near-future, investors would definitely want a slice of this pie,” Bathini added.
Shares of NTPC on Thursday jumped 3.13 per cent to trade at Rs 426.7 apiece on the BSE, as of 11:45 am.
(With Agencies inputs)
