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  1. NTPC Green Energy IPO DRHP: Key strengths and risks you need to know

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NTPC Green Energy IPO DRHP: Key strengths and risks you need to know

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2 min read | Updated on September 19, 2024, 11:01 IST

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SUMMARY

NTPC Green Energy IPO is only a fresh issue of equity shares, and there is no offer-for-sale component, meaning that existing investors will not sell any stake.

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NTPC Green Energy is a a 'Maharatna' central public sector enterprise.

NTPC Green Energy IPO DRHP: NTPC Green Energy, a renewable energy subsidiary of state-run NTPC, has filed preliminary papers with the markets regulator, the Securities and Exchange Board of India, for its mega ₹10,000 crore initial public offering (IPO).

NTPC Green Energy IPO is only a fresh issue of equity shares, and there is no offer-for-sale component, meaning that existing investors will not sell any stake.

The fresh issue proceeds, totalling ₹7,500 crore, will be used for debt repayment of its subsidiary NTPC Renewable Energy Ltd and general corporate purposes.

NTPC Green Energy IPO: Strengths

  • The company is promoted by NTPC, which has extensive experience handling large-scale projects, long-term relationships with suppliers and offtakers and financial strength.
  • Experienced in renewable energy project execution, procurement, operation and maintenance.
  • Its portfolio of operating solar and wind projects has yielded growth in revenues and EBITDA with solid credit ratings that enable a low cost of capital employed.
  • Experienced management team

NTPC Green Energy IPO: Risks

  • There is a concentrated pool of utility firms and power purchasers for the electricity generated by NTPC Green Energy's plants and projects. The company derived over 87% of its revenue from its top five off-takers in the financial year 2023-24. The renewable energy firm's single largest off-taker contributed around 50% of revenue from operations in FY24.
  • Business and profitability depend on the availability and cost of solar cells, solar modules, wind turbine generators, and other materials. Equipment requirements are also dependent on third-party suppliers.
  • Renewable energy project construction activities might be subject to cost overruns or delays, adversely affecting business.
  • Operating renewable energy projects are concentrated in Rajasthan. Any social, political, seasonal of economic disruption can affect business.
To learn more about IPO listings, schedules, and upcoming IPOs, click here.

About The Author

WhatsApp Image 2024-06-20 at 9.58.49 AM.jpeg
Kamal Joshi is a business journalist who covers industries, markets and IPOs. He is passionate about breaking news and enjoys playing tennis, where he loves flexing his backhand.

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