NTPC Green Energy IPO: Key strengths, risks, strategies and financials from RHP you need to know

NTPC Green Energy IPO: The initial public offering (IPO) of NTPC Green Energy Ltd will be open from November 19 to November 22. With a price band of ₹102-₹108 per share, the IPO is a fresh issue of equity shares worth ₹10,000 crore without an offer-for-sale component. As the initial share sale goes live next week, here are the key strengths, risks, strategies, and financials you need to understand.

NTPC Green Energy IPO: Strengths

• NTPC Green Energy is promoted by NTPC Limited, which has vast experience in executing large-scale projects and has long-term relationships with offtakers and suppliers.
• As of September 30, 2024, it has a portfolio of 16,896 MW of wind and solar projects.
• It has an experienced team to executive, procure and maintain renewable energy projects.
• The company's growing revenues and credit ratings enable a low cost of capital employed.
• Experienced management team

NTPC Green Energy IPO: Risks

• The company derives over 87% of its revenue from the top five offtakers in the financial year 2023-24, with the single largest off-taker contributing nearly 50% of its revenue. Loss of any customer can affect the business.
• The company depends on third-party suppliers for its material, component, and equipment requirements. Disruption in timely supply can impact business and finances.
• In the financial year 2023-24 (FY24) and the six-month period ending September 30, 2024, NTPC Green Energy's operating renewable projects were concentrated in Rajasthan. Any political, social, or economic disruption in the state can affect business.
• The company has faced substantial indebtedness, and an inability to comply with repayment could adversely affect business and financial condition.
• The business is seasonal, and operating results may fluctuate from time to time.

NTPC Green Energy IPO: Strategies

• Expand the project pipeline through prudent bidding and strategic joint ventures.
• Focus on new energy solutions like green hydrogen, green chemicals and battery storage.
• Enhance project execution to control costs and optimise the output of projects.

NTPC Green Energy IPO: Financials

HDFC Bank Ltd, Nuvama Wealth Management Ltd, IDBI Capital Market Services Ltd and IIFL Securities Ltd are the book-running lead managers to the issue, while Kfin Technologies is the registrar.