NTPC Green’s Rs 10,000 crore IPO opens today

Rs 3,960 cr anchor quota:

The company allotted shares worth Rs 3,960 crore to anchor investors on Monday at Rs 108 per share. Among those who received an allotment in the anchor category were Goldman Sachs, Government of Singapore, Monetary Authority of Singapore, Life Insurance Corporation of India and ICICI Prudential.

IPO proceeds to go to company:

NTPC Green Energy’s IPO will be entirely a fresh issue of equity shares and there will be no Offer for Sale (OFS) by existing shareholders for the same. This means the entire IPO proceeds will go to the company. This will be the third largest IPO of the year, following Hyundai Motor India’s Rs 27,870 crore issue and Swiggy’s Rs 11,300 crore IPO.

Parent NTPC Ltd’s share price is currently quoted at Rs 374.60 on the exchanges.

Operations:

Incorporated on April 7, 2022, the company’s parent NTPC Ltd transferred its renewable energy assets comprising of 15 solar/ wind energy units to NTPC Green on February 28, 2023. Further, NTPC also transferred its equity shareholding in NTPC Renewable Energy Ltd to NTPC Green through a share purchase agreement.

NTPC Green’s operational capacity was 3,071 MW of solar projects and 100 MW of wind projects across six states as of August 2024. “We are strategically focused on developing a portfolio of utility-scale renewable energy projects, as well as projects for public sector undertakings and Indian corporates,” it said in the Red Herring Prospectus (RHP).

“Our projects generate renewable power and feed that power into the grid, supplying a utility or offtaker with energy. For our operational projects, we have entered into long-term Power Purchase Agreements or Letters of Award with an offtaker that is either a Central government agency like the Solar Energy Corporation of India or a State government agency or public utility,” the RHP said.

Use of IPO proceeds:

The company proposes to utilise the net proceeds towards funding the following objects: Investment in wholly-owned Subsidiary, NTPC Renewable Energy Ltd (NREL) for repayment/ prepayment, in full or in part of certain outstanding borrowings availed by NREL and general corporate purposes, the RHP said.

The company intends to utilise a portion of net proceeds aggregating to Rs 7,500 crore in the form of equity or debt or a combination of both or in any other manner as may be decided by the board for repayment and/ or prepayment, in full or part, of certain borrowings availed by NREL from banks and financial institutions.

As on July 31, 2024, the company had outstanding borrowings of Rs 16,235 crore on a consolidated basis.

Financial performance:

The company reported a consolidated revenue Rs 578.44 crore and a profit after tax of Rs 138.61 crore during the three months ended June 2024. Revenue for the fiscal ended March 2024 was Rs 1,962.59 crore and profit after tax at Rs 344.72 crore.