India's NTPC Green Energy files for $1.2bn IPO

NTPC Green Energy Limited (NGEL), a subsidiary of India’s state-owned power company NTPC Limited, has submitted a draft red herring prospectus (DRHP) for its planned INR100bn ($1.2bn) initial public offering (IPO), according to an announcement by NTPC Limited on September 19.

NGEL is proposing to launch an IPO of its equity shares with a face value of INR10 each, comprising a fresh issue of shares worth up to INR100bn. In line with regulations from the Securities and Exchange Board of India, the IPO will include a reserved portion for eligible shareholders and employees of NTPC and its subsidiaries.

This is likely to be one of the biggest IPOs by an Indian state-owned entity in recent years. 

As outlined in the DRHP, the IPO will consist solely of new equity share issuance, with no offer-for-sale (OFS) component. NTPC intends to use INR75bn of the proceeds to repay or prepay a portion of NGEL’s loans, with the remaining funds earmarked for general corporate purposes.

NGEL serves as the hub for NTPC’s green energy initiatives and focuses on both organic and inorganic projects. Its goal is to lead NTPC’s transition to renewable energy, targeting a capacity of 60 GW by FY 2032. The company has diversified its portfolio in green energy and is actively participating in tenders, bidding processes, and Ultra Mega Renewable Energy Power Parks (UMREPP).

As of August 2024, NGEL had an operational capacity of 3.071 GW from solar projects and 100 MW from wind projects.

In an interview with Financial Express, NTPC chairman and managing director Gurdeep Singh had said the listing of its wholly owned green subsidiary will increase the valuation of the parent company.

Singh told the newspaper that the green energy segment in India holds great potential and that NGEL could become “an even bigger company than NTPC Ltd” once listed.

India is aiming to have a renewable energy capacity of 500 GW by 2023. At the recently held 4th Global Renewable Energy Investor’s Meet and Expo (RE-INVEST) in Gujarat, the Indian government garnered investment commitments amounting to INR32.45 trillion by 2030, Union Minister for New and Renewable Energy Prahlad Joshi said on September 17.