NTPC Green Energy, the renewable energy arm of state-owned NTPC, garnered bids worth 154.06 billion rupees ($1.83 billion) on Friday for its $1.2 billion initial public offering, as investors bet on the country’s growing clean energy needs.
India has been scrambling to meet its clean energy targets and has ramped up investments in renewable energy and expanded capacity. It has to spend $385 billion by 2030 to meet its targets after falling short in 2022, per Moody’s Ratings.
The IPO has done reasonably well for itself and the fact they have achieved 2.41 times the overall share subscription is creditable, said Arun Kejriwal, founder of brokerage Kejriwal Research.
About three-quarters of the 593.2 million shares on offer were set aside for institutional investors, which were oversubscribed by 3.3 times. Most of these bids came during the final few hours of trading on Friday.
Meanwhile, the portion reserved for retail investors was oversubscribed by 3.4 times, after being fully subscribed on the first day of bidding on Tuesday.
At the upper end of its price band of 102-108 rupees apiece, NTPC Green is valued at $10.8 billion. Its IPO trails behind only Hyundai Motor India and Swiggy in size this year.
However, Indian stock markets, which hit multiple record highs earlier this year, have cooled off since September, falling over 8% from its last peak and causing some near-term concerns for the IPO, Prashanth Tapse, Senior Vice President of Research at Mehta Equities, said.
The IPO only includes fresh issue of shares, with NTPC not diluting its stake, according to the draft papers in the filing.
Anchor investors, including the Government of Singapore, the Abu Dhabi Investment Authority and the New World Fund, had also bought shares worth about $469 million ahead of the bidding date.
Trading on the stock exchanges is expected to begin on Nov. 27.
Reuters