NTPC Green Energy IPO will launch on November 19 and the company plans to raise Rs 10,000 crore from the primary markets. The IPO will close on November 22. The issue is entirely a sale of 92.59 crore fresh shares. The price band is set at Rs 102-108. But is it a good idea to subscribe? Know these key factors about the IPO before that-
NTPC Green Energy – Know more about the company
A detailed analysis of the NTPC Green Energy IPO RHP indicates that –
- Chunk of revenue from top 5 clients – There is a concentrated pool of utilities and power purchasers for electricity generated by the company’s plants and projects. The company’s 87% revenue came from the top five off-takers in FY24. The company’s single largest off-taker contributed around 50% of revenue FY24.
- Solar module cost impacts profits: The company’s business and profitability are substantially dependent on the availability and cost of solar modules, solar cells, wind turbine generators and other materials, components and equipment for NTPC Green Energy’s solar, wind and other projects. “We are dependent on third-party suppliers for meeting our materials, component and equipment requirements, and our top 10 suppliers accounted for 92.65% and 77.71% of our supplies in the six months period ended September 30, 2024 and in Fiscal 2024, respectively,” said the company in its RHP.
- Cost overruns: NTPC Green Energy’s renewable energy project construction activities may be subject to cost overruns or delays which may adversely affect its business, results of operations, financial condition, and cash flows.
- Rajasthan a key hub: The company’s operating renewable energy projects are situated in six states, but the major more than 60% of operating renewable energy projects are concentrated in Rajasthan. If there is any significant social, political, economic or seasonal disruption, natural calamities or civil disruptions in Rajasthan, it could have an adverse effect.
- Risk in PPAs: The company’s Power Purchase Agreements (PPA) may expose it to certain risks that may adversely affect its business. In addition, NTPC Green Energy is required to give performance bank guarantees guaranteeing the commencement of supply of power which could adversely affect its results of operation if invoked.
- Focus on renewable energy: The focus on renewable energy has been increasing significantly.
» Read More
