Moderated NTPC Green IPO price band with changing market sentiment: CMD

NTPC Ltd, which is the parent of the recently listed NTPC Green Energy Ltd (NGEL), on Tuesday said it moderated the price band of the initial price offering (IPO) to be in sync with the changing market sentiments. NGEL, which is the green energy arm of India’s largest power generator, launched its IPO earlier in the day in a price band of Rs 102-108 per share. The total offer size under the IPO is Rs 10,000 crore.

 

Gurdeep Singh, chairman and managing director (CMD) of NTPC Ltd, said: “We were in discussion and everyone was saying expectations (regarding IPO price band) was much higher. But after the sentiments got changed, we moderated the band. We could have priced it higher.”

 

 

Company officials pointed at the impact of US election results on the Indian markets and the subsequent slump of benchmark indices.

 

“We have kept this price band after several rounds of discussion with hundreds of prospective investors. Nothing has changed for the Indian power sector in the last one month (since the company submitted its draft red herring prospectus) except market sentiment. At this point of time, the price band makes sense. The kind of growth and appreciation of revenue is far better. There was much bigger demand from anchor investors and we found it difficult to accommodate them,” Singh said.

 

NTPC launched NGEL in 2021 as the dedicated arm for its green energy and energy transition projects. The company chose to go public after efforts to find a strategic investor failed due to below optimum valuation offered by foreign investors. NGEL’s IPO is entirely a fresh fundraise of Rs 10,000 crore and the parent is not divesting any stake.

 

In an interview to this paper last week, Singh had said the plan is to take NGEL to 60 gigawatt (Gw) by 2032, for which they would require Rs 3-3.5 trillion. “For the current phase of 19 Gw, we need close to Rs 1 trillion, of which the 20 per cent equity requirement will be met through this IPO. With plants getting commissioned, there is a cash flow of around Rs 65-70 lakh per megawatt (Mw). So, we will be quite comfortable to commission this 19 Gw,” he had said.