NGEL shares rallied 10 per cent post-listing on Wednesday. NTPC Green Energy shares were listed at ₹111.50 and ₹111.60 on the NSE and BSE, respectively, at a 3.2/3.3 per cent premium over the IPO price of ₹180.
Shivani Nyati, Head of Wealth at Swastika Investmart Ltd. said, “The listing surpassed modest expectations, supported by slightly improved market sentiment.”
“As a wholly-owned subsidiary of NTPC Ltd., the company benefits from a robust and diversified portfolio across geographies and off-takers. Its consistent top-line growth is encouraging, though temporary fluctuations in profitability and margins remain a concern. Despite the aggressive pricing based on the PE ratio, the company’s long-term prospects in the renewable energy space make it a suitable option for patient investors with a long-term horizon and we recommend to hold it with a stop loss at around 110,” Nyati added.
NTPC Green Energy listing signalled strong investor participation, according to Divyam Mour, Research Analyst, SAMCO Securities. “Offered at a Price-to-Earnings (P/E) multiple of 140, the stock’s valuation is notably higher than industry peers, raising questions about its sustainability in a market undergoing a correction phase.”
“While NGEL benefits from solid fundamentals and leadership in renewable energy, its premium valuation warrants caution. The stock is likely to consolidate around current levels as the market evaluates its ability to deliver on growth and profitability targets.”
“Investors are advised to track NGEL’s financial performance over the next two to three quarters, focusing on its capacity to sustain earnings growth and achieve operational milestones,” Mour added.
Shares of NTPC Green Energy rallied 10 per cent to trade at ₹122.65 as at 10.30 am on the NSE. Meanwhile, NTPC shares rose 2.07 per cent to ₹369.15 on the NSE.
IPO details
The IPO closed on November 22, 2024, with an overall subscription of 2.42 times the issue size. The QIB portion was booked 3.32 times, NIIs 0.81 times, retail portion 3.44 times, employee portion 0.80 times, and NTPC shareholders portion 1.60 times.
NTPC Green Energy, the subsidiary of power producer NTPC Ltd, fixed the price band for its ₹10,000 crore IPO in the range ₹102-108 a share. The company raised ₹3,960 crore from anchor investors, with state-run corporation LIC being the biggest investor, contributing ₹500 crore. It has finalised allocation of nearly 36.67 crore equity shares to anchor investors at a price of ₹108 per share.
“Out of the total allocation of 36.67 crore equity shares to the anchor investors, 14.53 crore shares were allocated to 16 domestic mutual funds through a total of 72 schemes,” NTPC Green Energy said in an exchange disclosure.
As per the exchange data filing, Life Insurance Corporation of India was 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 the top anchor investors.
The company aims to utilise ₹7,500 crore out of the net issue proceeds for repaying debt of its subsidiary NTPC Renewable Energy. Additionally, the funds will help the company repay or prepay outstanding borrowings and meet general corporate purposes.
KFin Technologies is the registrar and IDBI Capital Markets & Securities, HDFC Bank, IIFL Securities and Nuvama Wealth Management were the book running lead managers to the issue.