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The news of NTPC Green Energy (NGEL), a fully owned subsidiary of NTPC, receiving approval from the Securities and Exchange Board of India (Sebi) to raise Rs 10,000 crore through an initial public offering (IPO) has sparked a positive reaction in the stock market. NTPC's stock price experienced a 2% increase in trade on Tuesday, following the announcement.
The IPO is anticipated to take place in November 2024, as NGEL submitted its draft red herring prospectus (DRHP) in mid-September 2024. The IPO will involve the fresh issuance of shares. This move is a significant step for NTPC as the company aims to achieve a renewable energy (RE) capacity target of 60 GW by FY32. NGEL plays a pivotal role in achieving this ambitious goal.
The IPO is expected to unlock value for NTPC, its parent company. By listing NGEL on the stock exchange, NTPC aims to enhance the subsidiary's visibility and access to capital markets. This can provide NGEL with the necessary resources to further expand its renewable energy portfolio and contribute to NTPC's overall growth strategy. Additionally, the IPO is likely to attract investors seeking exposure to the burgeoning renewable energy sector.
Source: NTPC Green Energy's Rs 10,000 crore IPO likely to unlock value for parent