NTPC Green Energy price band

NTPC Green Energy Fixes Dates and Price Band for ₹10,000 Crore IPO

NTPC Green Energy Ltd., a subsidiary of NTPC Ltd. focused on renewable energy, has announced details for its upcoming ₹10,000 crore IPO. Set to be the third-largest IPO of 2024, following Hyundai Motor India and Swiggy, this IPO represents a significant entry in the green energy sector by one of India’s major public sector undertakings.

IPO Details:

1. Price Band: ₹102 to ₹108 per equity share
2. IPO Dates: Opens on November 19, 2024, and closes on November 22, 2024
3. Lot Size: 138 shares, with bids in multiples of 138
4. Face Value: ₹10 per share
5. Total Issue Size: 925,925,926 shares, amounting to ₹10,000 crore
6. Listing: BSE and NSE

Special Provisions:

• Employee Discount: ₹5 per share for eligible employees
• Shareholder Quota: Up to ₹1,000 crore reserved for existing NTPC shareholders
• Reservation by Investor Category:
  • 75% for Institutional Investors
  • 15% for Non-Institutional Investors
  • 10% for Retail Investors

Fresh Issue Structure:

• The IPO is entirely a fresh issue of shares, with no Offer For Sale (OFS) component. This move is expected to help NTPC Green Energy raise capital directly for expansion without diluting the parent company’s stake through secondary sales.

Business Overview:

NTPC Green Energy Ltd. aims to lead India’s renewable energy landscape by developing utility-scale projects. Leveraging the expertise and resources of its parent, NTPC, NTPC Green Energy has a strong foundation in renewable projects, primarily in solar and wind energy.

Advantages and Disadvantages of the IPO

Advantages:

1. Growth Potential in Renewable Energy: The IPO allows NTPC Green Energy to capitalize on the increasing demand for sustainable energy solutions in India.
2. Government Backing: Being a subsidiary of NTPC, a Maharatna PSU, NTPC Green Energy benefits from government support, regulatory incentives, and a reliable brand reputation.
3. Attractive for Institutional Investors: With 75% of the issue reserved for institutional investors, the IPO is expected to attract substantial interest from large investors looking to invest in renewable energy.

Disadvantages:

1. High Risk of Concentration: NTPC Green Energy has highlighted offtaker concentration risk, meaning the company relies on a limited number of clients for energy purchase agreements, increasing its financial vulnerability.
2. Project Execution Risks: Developing renewable energy projects involves significant execution risks, including regulatory approvals, technology challenges, and high upfront capital investment.
3. Market Sensitivity: The share performance may be volatile post-listing due to the highly competitive and evolving nature of the renewable energy sector.

Conclusion

NTPC Green Energy’s ₹10,000 crore IPO represents a pivotal opportunity for investors interested in renewable energy. While the IPO holds promising potential given India’s renewable energy goals and NTPC’s backing, risks related to project execution and client dependency should be carefully considered. Nonetheless, with no OFS and significant reservations for various investor categories, the IPO provides attractive entry points for institutional, retail, and NTPC shareholders.

FAQs

1. What is the price band for NTPC Green Energy’s IPO?
   • The price band for the IPO is set between ₹102 and ₹108 per share.
2. When will NTPC Green Energy’s IPO be open for subscription?
   • The IPO will open on November 19, 2024, and close on November 22, 2024.
3. Are there any discounts available in this IPO?
   • Yes, eligible employees will receive a ₹5 discount per share, and there is a reserved quota worth ₹1,000 crore for existing NTPC shareholders.
4. What are the major risks involved in this IPO?
   • NTPC Green Energy has mentioned risks related to client concentration, supplier dependency, and project execution in its prospectus.
5. How many shares will be available for retail investors in the NTPC Green Energy IPO?
   • 10% of the total issue will be reserved for retail investors, offering a significant opportunity for individual investors to participate.

NTPC Green Energy price band

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