NTPC Green Energy Files for ₹10,000 Crore IPO, Aims to Expand Renewable Energy Portfolio

NTPC Green Energy, the renewable energy subsidiary of Maharatna company NTPC, has officially filed preliminary papers with the Securities and Exchange Board of India (SEBI) to launch an initial public offering (IPO) aimed at raising ₹10,000 crore. This IPO will consist entirely of new equity shares, with no existing shareholders selling their stakes as part of the offer. The details were disclosed in the draft red herring prospectus (DRHP) submitted on September 18.

The funds raised through the IPO are intended for strategic financial purposes. Approximately ₹7,500 crore from the proceeds will be directed toward repaying or prepaying a portion of the outstanding loans held by NTPC Green Energy's subsidiary, NTPC Renewable Energy Ltd (NREL). The remaining funds will be used for general corporate activities, contributing to the overall growth and stability of the company.

The IPO, expected to be one of the largest by a public sector company in recent years, comes after NTPC Green Energy’s parent company, NTPC, continues to make significant strides in renewable energy. The company currently has a renewable energy portfolio comprising solar and wind projects spread across more than six Indian states. As of August 2024, the company had an operational capacity of 3,071 MW from solar projects and 100 MW from wind projects, with substantial plans for future growth.

NTPC Green Energy is working toward ambitious renewable energy targets, aiming to achieve 60 GW of renewable capacity by 2032. With its current capacity at 3.5 GW and an additional 28 GW under development, the company is positioning itself as a leader in India’s clean energy transition.

According to Mohit Bhargava, CEO of NTPC Green Energy, the IPO was primarily driven by the company’s need to secure equity for future projects. In a previous interview, Bhargava explained that raising capital from the markets was necessary to support the company's aggressive expansion in the renewable sector. NTPC Green Energy plans to spend around ₹10,000 crore on renewable projects in 2024 and anticipates capital expenditure of ₹15,000-₹20,000 crore in 2025 to bolster its green energy capacity.

The IPO is set to be managed by a consortium of financial institutions, including IDBI Capital Markets & Securities, HDFC Bank, IIFL Securities, and Nuvama Wealth Management, who will act as the book-running lead managers.

NTPC Green Energy’s IPO is also notable for being the largest public sector offering since Life Insurance Corporation (LIC) launched its ₹21,000 crore IPO in May 2022. The listing of NTPC Green Energy is expected to unlock significant value for investors, aligning with India’s broader renewable energy goals. The government’s push for clean energy has seen the country’s installed renewable energy capacity rise substantially—from 63 GW in FY12 to 191 GW by March 2024. Solar energy remains a driving force behind this growth, making up a large portion of the renewable energy mix.

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As India continues its march toward achieving a cleaner energy future, NTPC Green Energy’s IPO could provide a major boost to the renewable energy sector, helping the country meet its targets and reduce its carbon footprint.

Source: CNBC-TV18