NTPC Green Energy shares are set to make their stock market debut on Wednesday, November 27. Despite the current fluctuations in the market, the company’s initial public offering (IPO) attracted considerable interest, especially from non-institutional investors (NII) and retail participants, indicating a positive outlook on its growth prospects.
The IPO, which closed on November 22, was subscribed 2.42 times, demonstrating investor confidence in NTPC’s renewable energy division.
Shivani Nyati, Head of Wealth at Swastika Investmart Ltd, stated that NTPC Green Energy occupies a significant role in the renewable energy sector, making it an appealing option for long-term investors. However, she cautioned short-term traders to be careful, citing a modest grey market premium (GMP) and worries about high valuations. “The company’s varied portfolio across different regions and offtakers provides a crucial advantage,” Nyati remarked. While it has shown consistent revenue growth, the company still faces challenges from temporary variations in profitability and margins. At present, the GMP of ₹1.5 (1.39%) suggests minimal listing gains.
NTPC Green Energy IPO allotment: Check application status, latest GMP & listing date
Manish Chowdhury, Head of Research at StoxBox, anticipated a stable listing, forecasting that the stock would debut about 3 percent above the upper price band. “Considering its strong financial standing and strategic initiatives, investors who received allotments should look to hold the stock for medium to long-term growth,” Chowdhury advised. NTPC Green Energy boasts one of the largest renewable energy portfolios among public sector enterprises (excluding hydro), with a solar capacity of 3,220 MW and an additional 100 MW from wind projects spread across six states. Financially, NTPC Green Energy has shown robust growth, achieving a compound annual growth rate (CAGR) of 46.82 percent in revenue from FY22 to FY24, reaching ₹19,625.98 million. The profit after tax (PAT) margin was recorded at 17.56 percent in FY24, and the return on equity (RoE) stood at 17.76 percent.
Chowdhury pointed out the company’s solid fundamentals, emphasizing that its revenue streams are backed by Power Purchase Agreements (PPAs) with Indian government bodies and public utilities. “The renewable energy sector is growing swiftly, and NTPC Green Energy is strategically positioned to take advantage of this shift,” he noted.
Prashanth Tapse, Senior Vice President at Mehta Equities, shared similar sentiments. “This IPO presents an opportunity to invest in a prominent renewable energy player backed by NTPC Ltd. However, short-term returns may be limited due to current market dynamics,” he mentioned. Tapse recommended that allotted investors adopt a long-term holding strategy and advised non-allotted investors to consider buying the stock if it lists near the issue price.
Research analysts Narendra Solanki from Anand Rathi and Gaurav Garg from Lemonn Markets also encouraged investors to concentrate on the company’s long-term growth narrative.
With India positioned fourth worldwide in total renewable energy capacity, NTPC Green Energy stands to gain from the nation’s ambitious clean energy goals. Analysts concur that the company has promising long-term prospects, making it an attractive option for patient investors looking to enter the renewable energy market.