NTPC Green Energy IPO: Date, Price Band, Investment Opportunities, and Key Risks

NTPC Green Energy Ltd. (NGEL) is set to launch its highly awaited initial public offering (IPO) on Tuesday, with plans to raise ₹10,000 crore through the issuance of approximately 92.6 crore new shares.

IPO Details

Price Band: ₹102–₹108 per share.
Valuation: At the upper price band, NGEL is valued at a market capitalization of ₹91,000 crore.
Allocation:
- 75% reserved for Qualified Institutional Buyers (QIBs).
- 15% for Non-Institutional Investors (NIIs).
- 10% for Retail Investors.
Investment Limits:
- Retail investors can bid up to ₹2 lakh.
- NTPC shareholders have a special reservation to bid up to ₹4 lakh.

Utilization of Proceeds

The majority of the proceeds (75%) will be utilized to reduce debt. The remaining funds will support NGEL’s expansion plans, including:

Battery storage systems.
Hybrid energy projects.
Development of a Green Hydrogen Hub in Andhra Pradesh.

Company Overview

Established: 2022.
Renewable Portfolio:
- Total: 25.67 GW, with 2.93 GW operational.
- 20.32 GW in solar energy and 5.35 GW in wind energy.

Financial Performance

In the first half of the current fiscal year, NGEL achieved 51% of its previous year’s revenue.
Projected capacity additions:
- 3 GW by the end of FY2024.
- 8 GW by FY2027.

Key Risks

Despite its promising growth, NGEL faces several operational and market challenges:

Revenue Concentration:
- Over 87% of revenue comes from its top five clients, with one client contributing nearly 50%.
Geographical Dependency:
- A significant portion of projects are concentrated in Rajasthan, exposing the company to potential regional disruptions.
Supply Chain and Costs:
- Volatility in raw material prices and supply chain disruptions may affect operational scalability.

Conclusion

NTPC Green Energy’s IPO is one of the largest in India this year, offering a mix of high growth potential and strategic focus on renewable energy. However, investors should consider the company’s client dependency, regional concentration, and market risks before making investment decisions.

Disclaimer: This article is for informational purposes only and should not be considered investment advice. Consult a qualified financial advisor for personalized guidance.