IPO listed on 27 Nov'24
NTPC Green Energy Ltd
Minimum Investment
₹ 14,904 / 138 shares
Grey market premium
₹ 1 (1% premium)
Issue price
₹ 108
Listing price
₹ 112
Listing day %
12%
Listing on
Nov 27, 2024
Our Verdict:
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- NTPC Green Energy Ltd (NGEL) is India’s largest renewable energy public sector enterprise by operational capacity (excluding hydro). It plans to add 3 GW of capacity in FY25 and 5 GW in FY26, with a target of reaching 19.4 GW of operational renewable capacity by FY27.
- NGEL has demonstrated robust revenue and profit growth, supported by a strong balance sheet. The IPO is priced at a P/E ratio of 148x based on FY24 earnings. Though the valuation may limit short-term gains, the company’s growth prospects in a thriving sector remain promising.
- Backed by NTPC’s strong parentage, NGEL benefits from low operating costs, a diversified capacity portfolio, and access to cheaper capital. Taking these factors into account, this IPO is well-suited for long-term investors seeking exposure to India’s rapidly growing renewable energy sector.
About the company
Founded in
7 Apr'22
Managing director
Gurdeep Singh
- NGEL, a wholly-owned subsidiary of NTPC Ltd, specializes in renewable energy projects. It is the largest public sector enterprise in renewable energy (excluding hydro) based on both operational capacity and power generation.
- As of September 30, 2024, NGEL operates a total capacity of 3,320 MW, comprising 3,220 MW of solar and 100 MW of wind projects across 6 states. The company generates revenue by supplying solar and wind power to Indian government agencies and public utilities through Power Purchase Agreements (PPAs).
STRENGTHS
- Strong Parentage: NGEL benefits from being promoted by the NTPC group, a leader in large-scale project execution with long-standing relationships with off-takers and suppliers. The NTPC group contributes ~17% of India’s total installed power capacity and ~24% of its total power generation, reflecting its significant industry presence and effective management capabilities.
- Diverse Product Portfolio: NGEL boasts an extensive portfolio of utility-scale solar and wind energy projects, catering to PSUs and Indian corporates. As of September 2024, the company had 17 off-takers across 41 solar projects and 1 wind project. Its total portfolio stands at 26,071 MW, including 3,320 MW of operational capacity, 13,576 MW of contracted and awarded projects, and 9,175 MW of pipeline capacity.
- Impressive Financial Growth: NGEL has demonstrated exceptional growth, with revenue increasing at a CAGR of 47% from Rs 910.42 crore in FY22 to Rs 1,962.59 crore in FY24. Over the same period, net profit surged at a CAGR of 91%, from Rs 94.74 crore to Rs 344.72 crore.
- High Creditworthiness: NGEL enjoys a robust financial standing, backed by a strong balance sheet and a "AAA" credit rating from CRISIL as of May 8, 2024. Leveraging NTPC group's excellent credit profile and long-standing relationships with financial institutions, the company is well-positioned to maintain access to low-cost capital.
RISK FACTORS
- Off-Taker Dependency: In 2024, 87% of NGEL’s revenue is derived from just 5 off-takers, with the largest contributing around 50%. Losing any key off-taker could significantly impact the firm’s operations and financial health.
- Geographic Concentration: As of September 2024, 62% of NGEL’s renewable energy capacity is located in Rajasthan. Any major disruptions in the state—whether social, political, economic, or environmental—could negatively affect the company’s business and financial performance.
- Supply Chain Vulnerability: NGEL’s profitability heavily depends on the availability and cost of critical components like solar modules, cells, and wind turbines. With 36% of supply coming from the largest supplier and 92.65% from the top 10, delays or price increases could adversely affect operations and finances.
- Execution Challenges: Winning competitive bids and executing projects requires rigorous planning, research, and the ability to operate with tight margins. Future growth depends on the successful execution of ongoing projects. Any cost overruns or project delays could harm the company’s performance and financial stability.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 10,000 crore
Fresh Issue
₹ 10,000 crore
OFS
₹ -
Price range
₹ 102 - 108
Lot size
138 shares
Issue Objective
NGEL proposes to utilize the net proceeds from the issue towards:
- Investment in its wholly-owned subsidiary, NTPC Renewable Energy Ltd, to partially or fully repay its certain outstanding borrowings; and
- General corporate purposes.
Dates
Bidding open
19 Nov'24
Bidding close
22 Nov'24
Allotment date
25 Nov'24
Refund date
26 Nov'24
Listing
27 Nov'24
IPO Reservations
Qualified institutional buyers
>75%
Non-institutional investors
<15%
Retail individual investors
<10%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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