State-owned NTPC Green Energy on Wednesday announced the price band for its upcoming ₹10,000 crore initial public offering (IPO) as ₹102-108 per share. The IPO will open for subscription on November 19 and close on November 22. The anchor book will open for a day on November 18.
This is going to be the third biggest IPO of the year, following Hyundai Motor India's ₹27,870 crore issue and Swiggy's ₹11,300 crore IPO. However, it is poised to be the largest in terms of fresh issue as the issue is complete issuance of new equity shares and there is no offer for sale (OFS) component. Also, it will be the biggest IPO by a PSU since Life Insurance Corporation's ₹21,000-crore share sale in May 2022.
The company intends to use capital raised from 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 document filed with the SEBI, the company intends to 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.
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 public sector company had filed its IPO papers with the SEBI on September 18, 2024, while it received observation to go ahead in the last week of October.
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.
Ahead of the opening of the IPO, the shares of NTPC Green were commanding a grey market premium (GMP) of ₹9 in the unlisted market today.
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