NTPC Green Energy IPO opens today; brokerages recommend ‘Subscribe’.

NTPC Green Energy shares were priced Re 1 over the IPO price, reflecting a 0.93% grey market premium (GMP). Gray market observers believe this is a Rs 2 drop from Friday, November 14, 2024’s Rs 3 premium.

The public subscription period for NTPC Green Energy, the company’s renewable energy subsidiary, begins on November 19, 2024.

NTPC Green Energy IPO Details

The book-built NTPC Green Energy IPO raises Rs 10,000 crore with 92,59,25,926 shares. Minimum lot size is 138 shares, and IPO prices are Rs 102–Rs 108 per share. Retail investors must bid Rs 14,904 per lot at the top of the price range.

Grey Market Premium Declines

Grey market sources say this is a Rs 2 reduction from Friday, November 14, 2024’s Rs 3 premium.

Brokerages on NTPC Green Energy IPO

SBI Securities on NTPC Green Energy IPO

Based on post-issue capital, NTPC Green Energy is valued at 53.4x FY24 EV/Ebitda at the top price band of Rs 108.

SBI Securities expects NTPC Green Energy’s operational capacity to grow from 3.3 GW in September 2024 to 6 GW, 11 GW, and 19 GW by FY25E, FY26E, and FY27E.

Over FY24-27E, the brokerage expects NTPC Green Energy’s sales, Ebitda, and PAT to climb 79%, 117.2%, and 123.8%, respectively.

Anand Rathi on NTPC Green Energy IPO

Anand Rathi’s analysis on the NTPC Green Energy IPO highlights the business as a leading PSU in renewable power generation, with solar and wind assets and a rising concentration on hydroelectric power and energy storage projects.

NTPC Green Energy plans to increase its operational capacity from 3.3 GW in September 2024 to 6 GW, 11 GW, and 19 GW by FY25E–FY27E.

The IPO’s upper range of Rs 108 per share implies a Rs 91,000 crore market valuation. The issue requests a 4.96x price-to-book (PB) ratio and 259.56x price-to-earnings (PE) ratio, which Anand Rathi calls “aggressively priced.” It is based on FY25E annualized earnings and fully diluted post-IPO paid-up capital.

Given these variables, Anand Rathi advises subscribing to the IPO with a “Subscribe for Long Term” rating, seeing NTPC Green Energy as well-positioned to capitalize on renewable energy capacity expansion.

Bajaj Broking on NTPC Green Energy IPO

FY23 saw NTPC Green Energy earn Rs. 170.63 crore and net profit Rs. 171.23 crore. Revenue rose to Rs. 2,037.66 crore and net profit to Rs. 344.72 crore in FY24.

The first half of FY25, ending September 30, 2024, saw NTPC Green Energy earn Rs. 175.30 crore on Rs. 1,132.74 crore in revenue. Bajaj Broking notes a Rs. 118.68 crore deferred tax credit in FY23 profits.

The IPO’s asking price is 257.14 based on estimated FY25 earnings and 263.41 based on FY24 earnings, which Bajaj Broking calls “aggressively priced.”

Economy News Further Reading

More News