Investors are excited about NTPC Green’s IPO, but experts advise caution

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Subscribe to enjoy similar stories. The Street is excited about NTPC Green Energy’s recent announcement of an initial public offering (IPO), but industry experts said a better track record on executing projects would have offered investors more comfort. The equity fund manager of a large mutual fund house, who did not wish to be named, told Mint, “Right now, NTPC Green is this large public entity which plans to have 60GW of renewable energy capacity by FY32.

It will also start producing green hydrogen and green ammonia in the future. So it is on its way to becoming a one-stop solution for pure-play green energy. But the execution must follow.

Their installed capacity should have been higher." NTPC Green Energy had a modest 2.8GW or so of solar energy capacity and 100MW of wind energy capacity as of June. By comparison, its listed rival Adani Green Energy, which was formed five years before NTPC Green, had a total installed capacity of almost 11GW, including solar, wind and hybrid energy for the same period, according to NTPC Green’s draft red herring prospectus. A 100% subsidiary of NTPC Ltd, NTPC Green Energy came into existence in 2020.

It announced its plan for a ₹10,000-crore public offering on Wednesday amid an IPO frenzy in India. Analysts said the cash infusion from the IPO would significantly aid the company’s capacity expansion plans as the current installed capacity of its power generators does not bring in enough revenue to support its goals. Also read: NTPC powers ahead with plans for expansion, renewable energy business However, of the ₹10,000 crore it plans to raise, the company will only use ₹2,500 crore for capital expenditure on new projects.