Renewable Energy IPOs: NTPC, ONGC are among five PSUs planning to list their renewable energy arm; check details

Indian government plans to add 50 GW of renewable energy capacity annually for the next five years to achieve a cumulative target of 500 GW of renewable energy generation by 2030.

Backed by the Centre’s push for renewable energy and net-zero emission targets, many companies are entering the green energy space while the existing players are eyeing expansion or bolstering their position in the industry.

Listed PSUs like NTPC, ONGC, and SJVN Limited have already established their green energy subsidiaries and are also planning to list them soon.

Most recently, NTPC Ltd filed the IPO documents with the market regulator, the Securities and Exchange Board of India (SEBI), for its green energy arm. As per media reports, the company is planning to launch this IPO by November 2024.

Investors are also closely tracking the renewable energy IPOs for the investment opportunity. As many as five companies operating in the sector are likely to make their stock market debut in 2024.

NTPC Green Energy IPO

NTPC Green Energy Limited is a wholly-owned subsidiary of state-owned power sector giant NTPC Ltd. On September 18, NTPC Green Energy filed its Draft Red Herring Prospectus (DRHP) for its initial public offering. The company aims to raise ₹10,000 crore ( approx. $1.19 billion) through its IPO. The public issue consists of only a fresh issuance of shares and there is no Offer-For-Sale (OFS) component.

NTPC Green Energy plans to use the money raised via the public issue for repayment of loans worth ₹7,500 crore taken by its unit NTPC Renewable Energy. The proceeds will also be used for general corporate purposes.

The book running lead managers of the NTPC Green Energy IPO are IDBI Capital Markets & Securities, HDFC Bank, IIFL Securities and Nuvama Wealth Management.

NHPC Renewable Energy IPO

NHPC Renewable Energy is a subsidiary of NHPC Ltd., which focuses on the development and management of solar and wind energy projects.

The state-owned company is planning to either launch a public issue for NHPC Renewable Energy Ltd (NREL) or sell its stake in the company through private placements in two-three years, according to reports. Currently, details regarding the launch of the public issue or the size of the issue are not known.

However, the leading hydropower producer has said that it plans to increase its renewable energy capacity in the future. The green energy arm houses the PSU’s wind and solar projects. NHPC has a total installed capacity of 7097.2 MW of renewable energy, which includes both wind and solar projects.

SJVN Green Energy IPO

SJVN Green Energy Limited (SGEL) is a wholly-owned subsidiary of the state-owned power sector firm SJVN Limited. The subsidiary generates power from solar parks, hybrid projects, battery energy storage systems, and other renewable energy sources.

Earlier in April, SJVN informed the exchanges that SJVN Green Energy incorporated a Joint Venture with the Assam Power Distribution Company SGEL Assam Renewable Energy Limited to conduct business in the renewable power generation sector.

According to reports, SJVN is likely to incur a capital expenditure of ₹12,000 crore in FY25, a major part of which will be used for renewable capacity addition through SGEL.

While no official announcements have been made by the renewable energy major regarding a public issue, the company may consider going public soon to fund its investments in the sector, according to reports.

ONGC Green IPO

Oil and Natural Gas Corporation (ONGC) incorporated a wholly-owned subsidiary, ONGC Green, on February 27, 2024.

The newly incorporated subsidiary deals in the value chains of renewable energy businesses, such as biofuels/biogas, green hydrogen and its derivatives, such as green ammonia and green methanol, storage, carbon capture utilisation and storage, and LNG.

On September 13, ONGC informed the exchanges that ONGC Green has signed a share purchase agreement with PTC India to acquire a 100% stake in PTC Energy (PEL). The PTC India subsidiary has an aggregate operational wind generation capacity of 288.80 MW and operates 157 Wind Turbine Generators (WTGs) across all its wind farms.

As of now, the company has not announced any plans to file papers for an IPO; however, according to reports, it may consider such plans soon.

NLC India Green Energy IPO

NLC India, the leading state-owned power sector company, is looking to strengthen its position in the renewable energy segment through its wholly-owned subsidiaries, NLC India Renewables Ltd (NIRL) and NLC India Green Energy Ltd (NIGEL).

The company plans to make NLC India Green Energy Ltd a subsidiary of NLC India Renewables Ltd (NIRL), which in turn would make NIGEL a step-down subsidiary of NLC India.

According to reports, NLC India plans to launch an IPO for NLC India Renewables Ltd (NIRL) in 2024. NIRL houses NLC India's existing renewable energy assets. The company has renewable energy projects of about 1.4 GW.

Meanwhile, the PSU is also in the process of getting approvals to make NIGEL a subsidiary of NIRL. If the company fails to get the required approvals, a separate IPO could also be launched for NIGEL, according to reports.