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NTPC Green Energy vs Adani Green Energy: Who dominates the Indian renewable energy sector?
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6 min read | Updated on November 23, 2024, 08:54 IST
SUMMARY
India’s renewable energy sector is booming amid NTPC Green’s IPO, which will open for subscription on November 22, 2024. Here's a comparison of industry heavyweights NTPC Green and Adani Green Energy based on Key financial and operational metrics, along with future plans and projects under consideration.
Stock list
NTPC green IPO is over subscribed by 2.5x on the third day of the issue.
NTPC Green Energy, the unit of leading PSU energy conglomerate NTPC, has made an initial public offering for public subscription valuing NTPC Green Energy at ₹91,000 crore to ₹1 lakh crore, generating value for NTPC investors and setting the to-be-listed company on an independent path The IPO, which aims to raise ₹10,000 crore through the sale of 92.59 crore fresh shares, opened for bidding on Tuesday and will close on November 22, 2024. The price band has been set between ₹102 and ₹108 per share.
NTPC Green Energy, a wholly-owned subsidiary of NTPC Ltd incorporated in April 2022. NTPC Green is the largest renewable energy PSU in terms of operating capacity and power generation. The company operates 3,320 MW of solar and wind projects spanning 17 solar and two wind installations across six states.
Industry Overview
India is the 3rd largest global energy consumer after China and the United States and increased urbanisation and industrialization have necessitated the demand for clean energy keep increasing.
As of September 2024, India’s installed Renewable Energy (RE) capacity including large hydro, has increased to 201 GW from 63 GW in March 2012, the installed grid-connected RE generation capacity (including large hydro) in India constituted 45% of the total installed generation base.
At COP26, India committed to reducing GDP emission intensity by 45% and achieving 50% non-fossil fuel capacity by 2030, with a Net Zero target by 2070.
Globally, India ranks 4th in renewable energy, wind, and solar installations and is the second-largest RE market in the Asia-Pacific. Electricity demand grew at a CAGR of 8.4% between FY21-24 and is expected to rise 5.5%-6% annually over the next five years, driven by economic growth, infrastructure expansion, and government reforms aimed at improving power distribution and supply quality.
Let's compare two major players: NTPC Green v/s Adani Green
| Financial Metrics | NTPC Green | Adani Green |
|---|---|---|
| FY24’s Revenue (in ₹ Crore) | 1,962.6 | 9,220 |
| FY24’s Profit (in ₹ Crore) | 344.7 | 1,260 |
| Market Capitalisation (in ₹ Crore) | 91,000 - 1,00,000(Based on Price Band) | 1,80,105 |
(Source: Screener.in)
At the lower end of its reported price band for NTPC Green is at ₹102, Adani Green’s market capitalisation is approximately 2 times that of NTPC Green.
| Company | P/E Ratio (Times) | EV/EBITDA (Times) | ROCE (%) |
|---|---|---|---|
| NTPC Green | 264 | 59 | 7.60% |
| Adani Green | 140 | 25.7 | 9.81% |
(Note- Market Values as on November 21st, 2024) (Source: Screener.in)
NTPC Green and Adani Green Financial Performance Overview
NTPC Green - For H1FY25, NTPC Green posted a net profit of ₹175.3 crore on revenue of ₹1,132.74 crore, reflecting strong growth. With a 16,866 MW portfolio, including 3,320 MW operational and 9,175 MW in the pipeline, NTPC Green is poised for robust expansion through MOUs and joint ventures.
Adani Green - In H1FY25, Revenue remained at ₹5,890 crore, and net profit stood at ₹1,144 crore. Strong revenue, EBITDA and Cash profit growth were primarily backed by robust greenfield capacity addition of 2,868 MW and consistent plant performance.
| Particulars | NTPC Green | Adani Green |
|---|---|---|
| Tariffs (₹/Kwh) | 3.4 | 4.2 |
| Capex Cost (₹ crore/MW) | 6.8 | 6 |
| Cash Return on Gross Capital Invested (CRoGCI) (%) | 9.6% | 14.7% |
(Source, Company, Kotak Institutional Equities)
Comparison of Key Performance Indicators as of September 30, 2024
| Operational KPIs | NTPC Green | Adani Green |
|---|---|---|
| Installed Capacity (MW) | 3,320 | 11,184 |
| Solar (MW) | 3,220 | 7,393 |
| Wind (MW) | 100 | 1,651 |
| Hybrid (MW) | - | 2,140 |
| Average CUF for the assets held as on last date of the financial year/period (%) | ||
| Solar | 24.61% | 23.90% |
| Wind | 28.27% | 35.70% |
| Hybrid | - | 42.90% |
(Source - NTPC Green’s RHP)
| Financial KPIs | NTPC Green | Adani Green | Remark |
|---|---|---|---|
| Total Revenue (₹ Crore) | 1,133 | 6,476 | |
| Operating EBITDA Margin (% of Revenue from Operations) | 86.07% | 83.65% | Higher the better |
| PAT margins % (as % of Revenue from Operations | 16.20% | 19.43% | Higher the better |
| Return on Net Worth | 5.53% | 12.81% | Higher the better |
| Net Debt/Equity | 1.91 times | 5.65 times | Lower the better |
| Interest Coverage | 2.60 times | 1.86 times | Higher the better |
(Source - NTPC Green’s RHP)
Other Metrics - Key leading project developers
| Particulars | NTPC Green | Adani Green |
|---|---|---|
| Years in Business (As on 30/09/2024) | 3 years | 10 years |
| Under construction/ Development capacity (GW) as of 30/09/2024 | under-construction: 8.13 Pipeline: 10.57 | Solar:16.8 Wind:2.4 Hybrid2.7 |
| Solutions offered | IPP Hybrid Corporates RTC/ Storage | IPP Corporates RTC/ Storage Solar Park development |
| Green Hydrogen ambitions | Planning for the development of an Integrated Green Hydrogen Hub in Andhra Pradesh; Hydrogen-PNG Blending at Kawas, Gujarat; Mobility at Leh and Delhi (Hydrogen Fuel Cell (FC) based electric vehicles) | Adani New Industries Ltd has planned a Green Hydrogen Project in Mundra, Gujarat |
(Source - NTPC Green’s RHP)
India’s renewable energy sector is witnessing robust growth, driven by government initiatives. Amid green energy IPOs, NTPC Green Energy IPO has generated strong retail investor interest, as the segment was fully booked within a few hours of its launch.
NTPC Green Energy IPO appears to be on track to be completed by the conclusion of the last bidding day, which is Friday, November 22. This reflects confidence in the sector’s growth potential and the increasing appeal of green investment in India.
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