The first day of the ₹10,000 crore initial public offer (IPO) of NTPC Green Energy (NGEL) was subscribed at 0.33 times with the retail portion getting fully subscribed at 1.33 times.
NGEL is the renewable energy arm of India’s largest power generator NTPC. The sale received bids for 19,46,53,968 shares against 59,31,67,575 shares on offer, as per the NSE. The three-day IPO closes on November 22.
The portion for Retail Individual Investors (RIIs) fetched 1.33 times subscription while the category for non-institutional investors (NIIs) got subscribed 15 per cent.
NGEL has reserved 75 per cent of the IPO for Qualified Institutional Buyers (QIBs), 15 per cent for NIIs and 10 per cent for retail investors. The price band is ₹102-108 per share and the bid lot size is 138 shares and in multiples thereof.
Anchor investors
On Monday, NGEL raised ₹3,960 crore from anchor investors with state-run corporation LIC being the biggest investor worth ₹500 crore.
Of the total 36.67 crore equity shares for anchor investors at a price of ₹108 a share, 14.53 crore shares were allocated to 16 domestic mutual funds through a total of 72 schemes.
LIC got allotted 12.63 per cent, New World Fund 5.29 per cent, Goldman Sachs India 5.70 per cent and Government of Singapore 5.31 per cent, among others.
Other anchor investors include Goldman Sachs, Morgan Stanley, New York State Teachers Retirement System, Government of Singapore, Monetary Authority of Singapore, T Rowe, Abu Dhabi Investment Authority and BNP Paribas.
Domestic institutional investors include ICICI Prudential Mutual Fund, Nippon Life India, Kotak AMC, Aditya Birla Sun Life AMC, DSP Mutual Fund, SBI Life Insurance, HDFC Life Insurance, etc.
Project pipeline
NGEL will complete 19 gigawatts (GW) of renewable energy projects by March 2027. “Top priority remains that we reach 19 GW by March 2027. There is no uncertainty about this 19 GW. Land is there, PPA is there, connectivity is there, EPC contractor is there and funding is there. We have capitalised this company (NGEL) up to ₹7,500 crore, and today the capitalisation is ₹8,281 crore. I think all fundamentals are strong,” NTPC CMD Gurdeep Singh told reporters after the end of the first day of the IPO.
Asked about tariffs, he said that solar power has tariffs of around ₹2.5-2.6 per unit, while wind power is around ₹3.24-3.6 per unit.
Singh exuded confidence on the outcome of the IPO stating that NGEL has strong fundamentals with a robust medium to long-term outlook. Besides, it is backed by a parent with a strong balance sheet. “We started becoming very active post-2021. Before that we were doing it on cost plus basis and we gained a lot of experience. Thereafter, you will find that whenever we have participated, we have won at least one-third,” he added.