NTPC’s wholly owned NTPC Green Energy (NGEL) IPO to raise ₹8,000 crore, says CMD

The proceeds from the NTPC Green IPO would fuel NGEL’s green and energy transition projects, green hydrogen efforts, and energy storage technologies.

“Our balance sheet is very robust and healthy, and we can raise money easily. However, as a stated objective, we will go for 10% to start with, followed by 15% through OFS (offer for sale),” Singh said. He further iterated that the green energy division is expected to grow faster than the parent company. The follow-on offer will help NGEL meet the rule that necessitates at least 25% of the company’s shares to be publicly owned.

Singh also noted that the green energy portfolio is somewhat subdued and unable to pique investor confidence due to the NTPC group’s coal exploits. However, the IPO will help to raise its valuation under NGEL. People are ready to pay in higher multiples for carbon-free green businesses, which will lead to a larger valuation of the green arm of NTPC over the period.

Meanwhile, the CMD is confident that the green IPO won’t impact NTPC's stock. He pointed out that its P/E ratio is half that of private competitors and highlighted the potential of the carbon business.

Over the years, NTPC has ventured into an array of renewable energy businesses such as wind solar, nuclear energy, hydro and chemicals. Now, the company will focus more on growing its renewable and nuclear energy while exploring energy storage solutions, Singh added.

NTPC shares closed flat at ₹359.6 on Friday. The stock corrected by 3.96% over the past four days from its all-time high of ₹380.5 on May 24. In 2024, it returned 15.3% and soared by 103.74% over the past year.

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