NTPC Green Energy, the renewable energy arm of state-owned NTPC, is set to debut on the stock exchanges tomorrow, November 27, 2024. Analysts are cautiously optimistic about the company’s long-term prospects but anticipate a muted listing gain for investors.

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The IPO, which closed for subscription on November 22, was oversubscribed 2.42 times, with significant demand from retail investors. 

Analyst perspectives

  • Anil Singh, Managing Editor, Zee Business: Anil Singhvi, Managing Editor of Zee Business, recommends subscribing to the NTPC Green Energy IPO with a long-term horizon of three years, citing the company's strong fundamentals. He highlights several positives, including its experienced promoters, leadership in the renewable energy sector, and stable growth prospects driven by long-term power purchase agreements (PPAs). The company also has ambitious plans for capacity expansion. However, Singhvi points out potential risks such as increased competition, dependence on government policies, and a regional focus in Rajasthan. Despite these concerns, he considers the IPO’s valuations reasonable, making it a solid long-term investment choice for investors.
  • Shivani Nyati, Swastika Investmart: The company’s diversified portfolio and consistent revenue growth are strengths, but aggressive valuations and margin fluctuations could limit short-term upside.
  • Prashanth Tapse, Mehta Equities: While market sentiment and valuations may cap listing gains to 0-5 per cent, NTPC Green Energy's focus on green hydrogen, chemicals, and battery storage positions it as a key player in India’s energy transition. Tapse advises long-term investors to hold despite short-term volatility.

IPO performance snapshot

  • Subscription breakdown:

    • Retail Individual Investors (RIIs): 3.44 times
    • Qualified Institutional Buyers (QIBs): 3.32 times
    • Non-Institutional Investors (NIIs): 0.81 times
  • IPO details:

    • Price band: Rs 102-108
    • Lot size: 138 shares

NTPC Green Energy’s ambitious goal of achieving 60 GW of renewable energy capacity by FY32 underscores its strategic importance in NTPC's green business initiatives. Non-allotted investors may consider accumulating shares around the issue price for long-term growth.