Unlisted shares of NTPC Green Energy Ltd traded at Rs 108 apiece in the grey market on Friday, which was the same as the issue price of Rs 108 per share.
The NTPC Green Energy IPO has finally been fully subscribed amid the increased participation of retail investors. Till 10:31 am on the final day of bidding on Friday, the Rs 10,000-crore initial public offering received 1.04 times subscription garnering bids for 58,12,19,292 shares as compared with the 56,01,58,217 shares on offer.
So far, retail investors have participated the most with their portion being subscribed by 2.72 times. The non-institutional investors (NIIs) and QIB categories received 0.40 times and 0.79 times subscriptions, respectively.
The NTPC Green Energy IPO will be closed on Friday at 5:00 pm.
It was subscribed by 99 per cent on the second day of bidding on Thursday.
NTPC Green Energy Ltd (NGEL) is the renewable energy subsidiary of state-owned NTPC Ltd.
NTPC Green Energy IPO GMP Today
The IPO’s grey market premium (GMP), which shows the readiness of investors to pay above the IPO issue price, has reduced to zero on Friday, signalling a flat or even negative listing. The IPO listing will take place on November 27.
According to market observers, unlisted shares of NTPC Green Energy Ltd traded at Rs 108 apiece in the grey market on Friday, which was the same as the issue price of Rs 108 per share.
Its GMP has fallen steeply in the past 20 days.
The GMP is based on market sentiments and keeps changing. ‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
NTPC Green Energy IPO: Analysts’ Recommendations
Most brokerages have given ‘subscribe for long term’ recommendations for the IPO.
SBI Securities in its IPO note said, “NGEL has a large portfolio of utility-scale solar and wind energy projects coupled with projects for PSUs and Indian corporates. The company along with the NTPC Group have a strong track record of developing, constructing and operating renewable power projects, driven by experienced in-house management and procurement teams.”
At the upper price band of Rs 108, NGEL is valued at FY24 EV/EBITDA of 53.4x on post issue capital. The company will increase its operational capacity to 6/11/19 GW by FY25E/FY26E/FY27E respectively from 3.3 GW as of September 2024. Basis our back of the envelope calculation, at upper price band, the issue is priced at FY25E/FY26E/FY27E EV/EBITDA multiple of 35.3x/18.3x/10.1x and EV/MW of Rs 16.8 cr/9.0 cr/5.1 cr respectively. The company has exponential growth potential in medium term with its Revenue/EBITDA/PAT expected to grow at a CAGR of 79.0%/117.2%/123.8% to Rs 11,250 cr/9,563 cr/1,980 cr respectively over FY24-27E period.
“We recommend investors to subscribe to the issue at cut-off price for long term,” SBI Securities said in the note.
Another brokerage firm Reliance Securities also granted a ‘subscribe for long term’ rating to the IPO.
It said NGEL benefits from NTPC’s financial strength and long-term relationships with off takers and suppliers, growing its revenues along with strong credit ratings that enable a low cost of debt executing large scale projects. NGEL has deep domain expertise of the management team focusing on new energy solutions like green hydrogen, green chemicals and storage with prudent growth and contributing towards fulfilling India’s net zero goals.
“We believe with a prudent business model and strong earnings growth with improved financials and return ratios, we recommend a Subscribe to the issue for the long term,” Reliance Securities said.
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NTPC Green Energy IPO: More Details
The Rs 10,000-crore IPO is a fully fresh equity issuance with no Offer-for-Sale (OFS) component. The public issue, priced between Rs 102 and Rs 108 per share, will be open for subscription from November 19 to November 22.
NTPC Green Energy mobilised Rs 3,960 crore from anchor investors a day before the IPO.
The company plans to allocate Rs 7,500 crore from the proceeds to repay or prepay loans of its subsidiary, NTPC Renewable Energy Ltd (NREL), with the remaining funds earmarked for general corporate purposes.
NTPC Green Energy, a ‘Maharatna’ central public sector enterprise, boasts a renewable energy portfolio that includes solar and wind power assets.
The IPO is being managed by IDBI Capital Markets & Securities, HDFC Bank, IIFL Capital Services (formerly IIFL Securities), and Nuvama Wealth Management as book-running lead managers.
