NTPC Green shortlists four i-banks for Rs 10,000 crore IPO

NTPC Green shortlists four i-banks for Rs 10,000 crore IPO

NTPC Green Energy has shortlisted four investment banks to manage its Rs 10,000 crore initial public offering, which would be the biggest by a state-owned entity since the share sale by Life Insurance Corporation of India in 2022.

Moneycontrol first reported on February 28 that close to a dozen investment banks had shown interest in managing the NTPC Green share sale.

According to people aware of the plans, IDBI Capital Markets and Securities, HDFC Bank, IIFL Securities and Nuvama Wealth Management have been shortlisted after financial and technical bids. IDBI Capital’s bid emerged as the lowest, they added. Ten investment banks including Goldman Sachs, Axis Capital, ICICI Securities and DAM Capital had bid for the IPO mandate, the people said.

Emails sent to parent company NTPC, IDBI Capital, Nuvama, IIFL and HDFC Bank did not elicit a response.

The IPO proceeds will be used to fund ongoing and future projects of the NTPC subsidiary across solar energy, green hydrogen and green ammonia, the people said.

NTPC Green was incorporated in April 2022 as a wholly owned subsidiary of NTPC to consolidate the parent company’s renewable energy assets. NTPC earlier planned to sell a 20 percent stake in NTPC Green to a strategic investor. Malaysian energy major Petronas emerged as the highest bidder for the stake with an offer of $460 million. However, the company later decided against the stake sale.

Project pipeline

In an interview with CNBC TV18 on February 27, Mohit Bhargava, CEO of NTPC Green Energy, said the company aims to go to the market with an IPO in FY25). Bhargava added that NTPC Green is working on a pipeline of just under 25-26 GW, of which about 8 GW is under construction.

NTPC Green signed a memorandum of understanding with the Maharashtra government in January to develop green hydrogen and derivatives such as green ammonia and green methanol capacity of up to 1 million tonnes per annum, including 2 GW of pumped storage projects and the development of 5 GW of renewable energy projects with or without storage. The agreement envisages a potential investment of about Rs 80,000 crore.

Public sector IPOs

At Rs 10,000 crore, NTPC Green’s IPO will be the biggest initial share sale by a public sector company since the Rs 21,000 crore IPO of Life Insurance Corp. in May 2022.

The proposed NTPC Green IPO follows the Rs 2,150 crore share sale of Indian Renewable Energy Development Agency (IREDA), a state-owned entity that finances renewable energy projects, in November 2023. The IREDA offer was subscribed 38.8 times.