NTPC Green Energy IPO: Shareholders Must Hold NTPC Shares Before RHP Release For Eligibility

The Securities and Exchange Board of India has approved the initial public offering of NTPC Green Energy Ltd., likely to open in the first week of November. A key aspect for potential investors is that shareholders of NTPC must hold their shares before the release of the Red Herring Prospectus to be eligible for a special portion of the offering.

NTPC Green Energy aims to raise Rs 10,000 crore through this IPO, which is expected to have a market capitalisation of around Rs 75,000 crore, based on calculations by NDTV Profit.

The IPO will consist entirely of fresh shares with no offer-for-sale component. The proceeds will primarily be used for debt repayment and general corporate purposes.

Retail investors can bid up to Rs 2 lakh in the offering. However, NTPC shareholders can participate in the shareholders' reservation portion, raising their bidding limit to Rs 4 lakh. Employees of NTPC Green Energy who also hold shares in NTPC are further advantaged, as they can bid in the shareholder, employee, and retail portions, totaling a maximum of Rs 6 lakh.

The Rs 10,000-crore issue comes as the government aims to expand renewable capacity to 500 GW by 2030 from the current 200 GW.

In the April-June quarter, NTPC Green recorded a net profit of Rs 138.6 crore on total revenues of Rs 578.4 crore. With a renewable energy capacity of 3.34 GW in solar and 0.21 GW in wind, NTPC Green has 8.13 GW under construction and a pipeline of 10.57 GW in renewable capacity, positioning itself strongly in the market.

NTPC share price rose as much as 2.57% to Rs 414.30 apiece. The stock pared gains to trade 0.72% higher at Rs 406.80 apiece, as of 12:25 p.m. This compares to a 0.62% decline in the NSE Nifty 50 index.

It has risen 73.40% in the last 12 months. Total traded volume so far in the day stood at 0.92 times its 30-day average. The relative strength index was at 41.9.

Out of 24 analysts tracking the company, 19 maintain a 'buy' rating, two recommend a 'hold,' and three suggest 'sell,' according to Bloomberg data. The average 12-month consensus price target implies an upside of 9.5%.