SBI Securities assures Long-Term Subscribe Rating to NTPC Green Energy

SBI Securities has given a long-term "subscribe" rating to the upcoming IPO of NTPC Green Energy. The research firm projects that the company's operational capacity will increase to 19 gigawatts by FY27, up from 3.3 gigawatts in September 2024. According to their analysis, NTPC Green Energy has significant growth potential in the medium term, with revenue expected to grow at a compound annual growth rate (CAGR) of 79%, reaching Rs 11,250 crore over the FY24-27 period.

Additionally, the firm anticipates the company's profits will grow at a CAGR of 123.8%, amounting to Rs 1,980 crore during the same timeframe.

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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.  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 natural calamity occurred in Rajasthan, SBI Securities noted.

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

 

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 NTPC Green Energy's IPO will open on 19 November. The issue, which is a book-built issue of Rs 10,000 crore, is entirely a fresh issue of 92.59 crore shares. The issue price is between Rs 102 and Rs 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 Rs 14,904. 

The grey market premium has slipped to Rs 3 on Thursday from Rs 25 on November 9. The GMP remained unchanged at Rs 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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