NTPC Green Energy IPO: All you need to know about the company's dividend policy from RHP

NTPC Green Energy Dividend Policy: The ₹10,000 crore NTPC Green Energy IPO, which is completely a fresh issue of equity shares, will open for subscription on Tuesday, November 19. The issue, with a price range of ₹102 to ₹108 per share, will end on November 22. The renewable energy firm's shares will be listed on the National Stock Exchange (NSE) and BSE on November 27.

The proceeds from the IPO will be used to repay the debt of the company's subsidiary, NTPC Renewable Energy Ltd, and for general corporate purposes.

NTPC Green Energy IPO: Dividend policy

In its red herring prospectus (RHP), NTPC Green Energy mentioned that all central public sector enterprises, including itself, are required to pay a minimum annual dividend of 30% of net profit or 5% of the net worth, whichever is higher.

The IPO papers stated that the company's Board approved its dividend distribution policy on September 9, 2024.

The RHP said that the future dividend, if any, will depend on several factors such as earnings, guidelines issued by the Department of Public Enterprises (DPE), capital requirements and the company's overall financial condition.

"In addition, our ability to pay dividends may be impacted by a number of factors, including the results of operations, financial condition, contractual restrictions, and restrictive covenants under the loan or financing arrangements we may enter into...Our company may also, from time to time, pay interim dividends," NTPC Green Energy said.

The renewable energy firm clearly mentioned that "there is no guarantee that any dividends will be declared or paid or that the amount thereof will not decrease in the future".

NTPC Green Energy IPO: Has the Company paid any dividends since its inception?

NTPC Green Energy was incorporated in April 2022. According to the RHP, the company has not paid any dividends since its inception.

NTPC Green Energy Ltd, a wholly owned subsidiary of NTPC Ltd, is the largest renewable energy PSU (excluding hydro). Its renewable energy portfolio includes solar and wind assets.