NTPC is planning an IPO of its green energy business by October-November

State-owned power utility NTPC has charted a clearer path to unlocking value in its renewable energy business and in a call it told analysts that NTPC Green is likely to go public by October-November this year.

NTPC Unlock Value

The process of raising capital from the primary market was already underway, and last month Moneycontrol reported that investment bankers for the proposed Rs 10,000-crore initial public offering had been shortlisted in April. Earlier, in February this year. Money control quoted Mohit Bhargava, CEO, NTPC Green, stating that the company intends to tap the primary market by FY25. “We are in the process of appointing merchant bankers and as we see, if we finally manage to enter the market, it will take us at least eight to nine months from the current level if we finally manage to enter the market,” Mohit Bhargava told CNBC-TV18 in February 2024.

According to the company, the proceeds from the IPO are to be used to finance current and future projects in the field of solar energy, green hydrogen and green ammonia. With an expected issue size of Rs 10,000 crore, NTPC Green’s IPO will be the largest initial public offering of shares by a public sector company since Life Insurance Corp.’s IPO. worth Rs 21,000 crore in May 2022.

Ambitious orders

In a post-Q4FY24 earnings call with analysts, NTPC said it is focusing on 15.2 GW of new thermal power orders in the coming years and has also increased the number of orders for its thermal capacity. NTPC said it currently aims to award contracts worth 10.4 GW for power projects in FY25, which is much higher than earlier expected.

Also on the commissioning front, NTPC said it expects to commission power projects of 2.8 GW in FY25 and 1.5 GW in FY26.

Broker view

Given NTPC’s 25% share of India’s power generation and the country’s plan to add 30-40 GW of renewable energy annually, Nuvama argues that the utility is able to maintain its market share without the need for external capital.

Follow the fine print of NTPC earnings here

About NTPC Green
NTPC Green was incorporated in April 2022 as a wholly owned subsidiary of NTPC to consolidate the parent company’s renewable energy assets.