NTPC Green Energy gets SEBI’s nod for IPO; aims to raise ₹10,000 cr

NTPC Green Energy, the renewable energy arm of state-owned National Thermal Power Corporation (NTPC), has received final observation from the capital markets regulator, Securities and Exchange Board of India (SEBI), to launch its initial public offering (IPO). The public sector company had filed its IPO papers with the SEBI on September 18, 2024, proposing to raise ₹10,000 crore via IPO route.

The issue, which is completely a fresh issue of equity shares, is touted to be the biggest IPO by a PSU since Life Insurance Corporation's ₹21,000-crore share sale in May 2022.

NTPC Green Energy is a 'Maharatna' central public sector enterprise, which was formed in 2022 as a subsidiary of NTPC. In 2023, NTPC transferred its stake in NTPC Renewable Energy (created in 2020) to NTPC Green Energy.

The company intends to use IPO proceeds to invest in its wholly owned subsidiary, NTPC Renewable Energy, to repay its certain debts. A part of the fund will be used to meet general corporate purposes. 

As per the DRHP, the company will use 75% of the raised capital (₹7,500 crore) to clear debts availed by NTPC Renewable Energy Limited (NREL). As per the IPO document, NREL has entered into various borrowing arrangements, including borrowings in the form of term loans and various fund-based and non-fund based working capital facilities. As on July 31, 2024, the company had outstanding borrowings (fund based) of ₹16,235 crore on a consolidated basis.

NTPC Green Energy is the largest renewable energy public sector enterprise (excluding hydro) in terms of operating capacity as of June 30, 2024 and power generation in fiscal 2024, as per CRISIL report cited in the DRHP. The operational capacity was 3,071 MW of solar projects and 100 MW of wind projects with presence in more than six states.

As of June 30, 2024, the company’s portfolio consisted of 14,696 MWs, including 2,925 MWs of operating projects and 11,771 MWs of contracted and awarded projects. It had 15 offtakers, including government agencies and public utilities, across 37 solar projects and 9 wind projects.

The company’s renewable energy portfolio encompasses both solar and wind power assets with presence across multiple locations in more than six states which helps mitigate the risk of location-specific generation variability, according to a CRISIL Report mentioned in the DRHP.

As of June 30, 2024, NTPC Green had 15 offtakers across 37 solar projects and 9 wind projects and are in the process of constructing 31 renewable energy projects in 7 states consisting of 11,771 MWs contracted and awarded. It also had 2,925 MWs operating across 14 solar projects and 2 wind projects.

For the financial year 2023-24, NTPC Green Energy posted revenue from operations at ₹1,962.6 crore and profit after tax at ₹344.72 crore. The operating EBITDA for the fiscal was ₹1,746.47 crore, while the margin stood at 88.99%. 

The revenue from operations grew at a CAGR of 46.82% from ₹910.42 crore in fiscal 2022 (on a special purpose carved-out basis) to ₹1,962.60 crore in fiscal 2024 (on a restated basis). Profit after tax grew at a CAGR of 90.75% from ₹94.74 crore in fiscal 2022 (on a special purpose carved-out basis) to ₹344.72 crore in fiscal 2024 (on a restated basis).

For the three-month ended June 30, 2024, revenue from operations and profit after tax stood at ₹578.44 crore and ₹138.61 crore, respectively, on a restated basis.

IDBI Capital Markets & Securities Limited, HDFC Bank Limited, IIFL Securities Limited, and Nuvama Wealth Management Limited are the book-running lead managers to the issue and KFin Technologies Limited is the registrar to the offer.

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