Trending IPO: The IPO of NTPC Green Energy, a government company in the renewable energy sector, is opening today on Tuesday, 19 November. Retail investors can bid in it till November 22. The company has fixed the price band for the IPO at Rs 102-108 per share. There will be 138 shares in 1 lot. Whereas the size of IPO is Rs 10,000 crore. This government company is a subsidiary of already listed PSU NTPC. The company’s shares will be listed in the stock market on November 27.
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No Offer for Sale (OFS)
NTPC Green Energy IPO: The size of the IPO of the renewable energy sector company is Rs 10,000 crore. In this, shares will be issued at the face value of Rs 10. According to the information given to SEBI, NTPC Green’s Rs 10,000 crore IPO is entirely of fresh equity shares. There will be no Offer for Sale (OFS) in this. Retail investors will have to bid for at least 138 shares. That means an investment of at least Rs 14,904 is necessary. Retail investors will be able to bid for a maximum of 13 lots.
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Long term subscription advice
Brokerage house SBI Securities has advised to subscribe for long term on NTPC Green IPO. The brokerage says that at the upper price band of Rs 108, the company’s valuation stands at 53.4x FY24 EV/EBITDA on capital issued. The company will increase its operating capacity to 6, 11 and 19 GW by FY25E, FY26E and FY27E, from 3.3 GW by September 2024. The company has the potential for rapid growth in the mid-term. The company’s Revenue, EBITDA and PAT are expected to grow at 79.0%, 117.2% and 123.8% CAGR in the FY24-27E period to Rs 11,250 crore, Rs 9563 crore and Rs 1980 crore respectively.
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Company growth strategy
• The company continues to expand its project pipeline through prudent bidding and strategic joint ventures with PSUs and private corporates.
• The company’s focus is on projects in new energy solutions like green hydrogen, green chemicals and battery energy storage systems (BESS).
• Continuous reduction in efficiency and cost of project execution and operation and maintenance.
• Continues to contribute to India’s sustainability efforts.
• Strong product portfolio with diversification across different geographies and off-takers
• Experience in renewable energy project execution.
how much reserve for whom
About 75 percent of the public issue of this company will be reserved for qualified institutional buyers, while 15 percent of the IPO will be reserved for non-institutional investors. Whereas 10 percent of the IPO will be reserved for retail investors. Shares worth Rs 200 crore have been reserved for the employees of the company. Eligible employees will also get a discount of Rs 5 on each share in the purchase of shares. Apart from this, shares worth Rs 1000 crore have been kept in reserve for its shareholders.
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NTPC Green Energy GMP
Before the opening of IPO, government company NTPC Green Energy did not have much craze in the gray market. It is available at a premium of Rs 2 in the gray market. In this regard, there are indications of listing of the share at Rs 110 as against the IPO price of Rs 108. The bookrunning lead managers for NTPC Green Energies’ IPO are IDBI Capital Markets & Securities, HDFC Bank, IIFL Securities and Nuvama Wealth Management. While the registrar for the offer is KFin Technologies. The proceeds from NTPC Green IPO will be used for loan repayment and other general corporate purposes. Some of the amount will be used for investment in its wholly owned subsidiary NTPC Renewable Energy.
What is the business of the company?
NTPC Green Energy is the largest public sector renewable energy undertaking (except hydro) in terms of operational capacity till June 2024 and power generation in FY 2024. NTPC Green’s portfolio comprised 14,696 MW, which included operational projects of 2,925 MW and contracted and awarded projects of 11,771 MW. The company’s renewable energy portfolio includes solar and wind energy assets located at multiple locations in more than 6 states, which helps reduce the risk of location-specific output variability.
NTPC Green Energy’s revenue from operations has grown at a CAGR of 46.82% from Rs 910.42 crore in FY2022 to Rs 1,962.6 crore in FY2024. The company’s net profit grew at a CAGR of 90.75% from Rs 94.74 crore in FY22 to Rs 344.72 crore in FY24.
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