India's largest domestic institution, Life Insurance Corporation of India, will participate additionally in the IPO of NTPC Green Ltd. after subscribing to the anchor book, according to people aware of the development. The state insurer which has the largest corpus of asset under management will double down its investment in the NTPC subsidiary.
LIC had already invested Rs 500 crore in the anchor book of NTPC Green in a rare participation, as the state-owned insurer does not normally participate in IPOs and acquires the shares from the secondary market. It makes exception for only public sector issuances. The participation in the NTPC Green IPO is seen as an attempt to increase exposure to renewable energy sector by the largest domestic investor.
LIC has investment in 45 utilities which include renewable energy generators and state-owned power companies.
NTPC Green is raising Rs 10,000 crore in equity by offering up to 11% equity in the IPO, valuing the the company at Rs 91,000 crore at the upper end of the price band. The IPO is priced between Rs 102-108 per share.
The company's total portfolio stands at 25.67 gigawatts, with an operational portfolio of 2.93 GW. Its contracted and awarded capacity stands at 14.7 GW and projects under pipeline stand at 10.98 GW. Its total portfolio consists of 20.32 GW of solar capacity and 5.35 GW of wind capacity.
The state-owned power company aims to take this capacity to 60 GW by 2032, the management indicated during the IPO road show. This would entail an investment of up to Rs 3.5 lakh crore, which the company will finance via internal accruals and equity as it plans to reach 25% public shareholding norm in the next three years. NTPC is unlikely to invest further in the subsidiary unless the need arises. It has so far invested Rs 7,500 crore in equity in the green arm.
As per regulation, no single QIB allottee can receive more than 50% of the issue size. Which means, LIC can additionally seek up to Rs 1,400 crore of shares in the IPO.
The initial public offering of NTPC Green Energy Ltd. has been subscribed 93% on its second day of bidding on Thursday. It was booked 33% on its first day. The company will sell shares worth Rs 10,000 crore, entirely via a fresh issue of approximately 92.6 crore shares.
Of the total IPO size, 75% is reserved for qualified institutional buyers, 15% for non-institutional investors, and the remaining 10% is to be allotted to retail individual investors. 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 and if they happen to be an NTPC employee, their bid can go up to Rs 6 lakh.
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