SBI Securities gave a long term subscribe rating to the upcoming IPO of NTPC Green Energy.

What The Brokerage Said: The research firm said that the company will expand its operational capacity to 19 gigawatts in FY27 from 3.3 gigawatts in September 2024. 

According to the brokerage's calculation, the company has exponential growth potential in the medium term with revenue expected to grow at a compound annual growth rate (CAGR) of 79% to ₹11,250 crore over FY24-27 period.

The research firm also sees the company's profits grow at a CAGR of 123.8% to ₹1,980 crore in the same time period. 

The brokerage firm counts the company's robust product portfolio across diverse geographies, experience in renewable power execution and access to low capital as positives for the company. 

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Regarding the risks, the research firm said that the company has a geographical risk with 62.2% of NTPC Green's operating capacity concentrated in Rajasthan. The company would face disruption if any political, economic, seasonal or natual calamity occured in Rajasthan, SBI Securities noted.

The company also dependent on its top 9 off takers for 98% of its revenue in first half of FY25 and loss of any one customers will deeply effect the company's financial condition.

Details About IPO: NTPC Green Energy's IPO will open on November 19 and will close on November 22. The issue, which is a book built issue of ₹10,000 crore, is entirely a fresh issue of 92.59 crore shares. The issue price is between ₹102 and ₹108. The minimum lot size for an application is 138 shares which means that at the upper price band, the minimum investment required by retail investors is ₹14,904. 

NTPC's grey market premium has slipped to ₹3 on Thursday from ₹25 on November 9. The GMP remained unchanged ₹3 on Wednesday when the company announced the IPO date. It’s important to note that while GMPs can provide some insight into market sentiment towards an IPO, they are not always a reliable predictor of the stock’s performance upon listing.

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