NTPC Green Energy IPO day 3: GMP, subscription status, review. Apply or not?
NTPC Green Energy's IPO, valued at ₹10,000 crore, was fully subscribed on Friday. Priced between ₹102 to ₹108 per share, it closes today. Experts recommend long-term investment despite aggressive pricing based on annualized earnings projections.
NTPC Green Energy IPO day 3: The initial public offering (IPO) of NTPC Green Energy has attracted decent buying interest. By 4:30 pm on Friday, the issue had been subscribed to 2.40 times. The ₹10,000 crore book-built issue, priced in the range of ₹102 to ₹108 per share, opened for subscription on Tuesday, November 19, and closes today, Friday, November 22. The company is expected to finalise share allotment on Monday, November 25, with shares credited to the demat accounts of successful bidders by Tuesday, November 26. The stock is likely to debut on the BSE and NSE on Wednesday, November 27, 2024.
NTPC Green Energy IPO GMP today
The grey market premium (GMP) of NTPC Green Energy has been declining since the IPO opened. On November 19, the first day of the issue, NTPC Green Energy IPO GMP stood at ₹3, but it dropped to ₹0.80 by the second day. According to market sources, the last GMP for NTPC Green Energy is zero, suggesting that the stock may see a flat debut on Indian bourses.
'Grey market premium' indicates investors' readiness to pay more than the issue price.
NTPC Green Energy IPO subscription status
According to BSE data, by 4:30 pm on Friday, the issue had been subscribed to 2.40 times, with the retail portion booked 3.36 times, the NII portion subscribed 0.80 times, and the QIP segment booked 3.32 times.
NTPC Green Energy IPO was subscribed 93 per cent by the end of the second day of subscription. The segment reserved for retail investors saw the highest subscription at 2.38 times, while NIIs' portion was booked at 34 per cent, and the portion reserved for QIBs was booked at 75 per cent. The IPO received cumulative bids for 54,97,38,180 shares against 59,31,67,575 offered. On the first day, the issue was booked 33 per cent.
NTPC Green Energy IPO review
Several experts and brokerage firms find the IPO attractive for the long term, even as some find the issue aggressively priced based on FY25 annualized earnings.
Bajaj Broking finds the issue a pure long-term investment opportunity.
Given the company's expansion plans, the brokerage firm underscored a significant increase in its revenue and profit from FY24 onwards, reflecting its current status and positive future prospects.
"If we attribute annualized FY25 earnings to post-IPO fully diluted equity base, then the asking price is at a P/E (price-to-earning) of 257.14 and based on FY24 earnings, the P/E stands at 263.41. Thus, the issue appears aggressively priced. However, considering its current established capacities and future expanded capacities, this is a pure long-term story. As clarified by the management, the company has no impact on renewable energy from the US policy as it has operations only in India," Bajaj Broking observed.
NTPC Green Energy IPO: Apply or not?
Experts appear largely positive about the issue. However, given the aggressive pricing, some suggest investors with surplus cash should bet on it for the long term.
"It is a leading renewable power-generating PSU with solar and wind power generation assets. It is also expanding into hydroelectric assets and emphasizing power storage plans. Although the company has posted net profits for the reported financial periods, the IPO is considered aggressively priced based on FY25 annualized earnings. Investors who are well-informed and have surplus cash might consider investing moderate funds for the long term, as this represents a pure long-term investment opportunity," said Bajaj Broking.
Analysts at brokerage firm Anand Rathi, too, recommend 'subscribe for the long term' on the issue.
"Based on FY25E annualized earnings and fully diluted post-IPO paid-up capital, the company is asking for a PB (price to book value) of 4.96 times and PE of 259.56 times, which appears aggressively priced. However, considering its current established capacities and future expanded capacities, this is a pure long-term story," said Anand Rathi.
"The company is well-placed to capture the tailwind from capacity addition in renewables owing to its strong parentage (NTPC), low operating costs, diversified capacity portfolio and access to lower cost of capital. Therefore, we believe this issue should be considered for its long-term growth. Hence, we give a “subscribe for long term” rating to this IPO," Anand Rathi said.
Geojit Securities has assigned a “subscribe” rating for the issue on a long-term investment basis, considering its strong brand recall, superior execution capabilities, portfolio expansions, investment in next-generation energy solutions (battery energy storage systems and green hydrogen derivatives) and promising industry outlook.
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Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.
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