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India’s NTPC Green Energy shares recovered after a subdued debut yesterday, settling 12% higher at closing on an issue price of 108 rupees ($1.28), drawing significant interest to the $1.2 billion IPO as investors bet on the growing demand for clean energy in the country.
Backed by the Abu Dhabi Investment Authority (ADIA), the green energy arm of NTPC, one of the largest renewable energy public sector enterprises in India, saw its stock jump to Rs 122.65 per share on the NSE by 1pm local time, up 13.56% from a listing price of INR 111.50.
On the BSE, the NTPC Green Energy stock, which listed at INR 111.60 apiece, saw its shares surge up to 13.65% to hit the upper circuit of Rs 122.75 within 30 minutes of trade.
“NTPC Green Energy Ltd. made a debut at the stock exchanges in India, opening at a premium of 3% over its upper price band but closed much higher by around 12%,” said Manish Chowdhury, Head of Research at StoxBox, a value broker and subsidiary of BP Wealth in India.
According to Chowdhury, the demand was reflective of the “significant and growing” need for renewable energy in India, “which ranks fourth globally in total renewable energy, wind, and solar installations.”
However, despite the significant gains in NTPC Green Energy shares, the rally appeared lukewarm compared to the strong market debut of Waaree Energies’ INR 43.2 billon IPO on October 28, which saw shares of India’s largest solar panel manufacturer list at INR 2,550, a 70% premium over its issue price.
“On its own, one could say the NTPC Green Energies debut was a strong one but compared to the Waaree listing from a month ago, the growth was muted, maybe even flattish,” according to a trader with a leading financial advisory in India.
“Waaree perhaps benefited from a lot of private investors, which already set a clear line compared to a PSU, where at least 51% of ownership is with the Indian government” he said.
StockBox’s Chowdhury added: “Given its strategic development and strong financial growth, the company is well-positioned to capitalise on opportunities in the renewable energy sector.”
Anchor investors
Ahead of its IPO, the state-owned company allocated 366.6 million equity shares at INR 108 per share to anchor investors, raising INR 39.60 billion, and drawing investments from two units of UAE sovereign investor ADIA.
ADIA’s Monsoon unit saw an allotment of 92,59,386 shares, with an amount allocation of INR 1 billion, representing 2.53%.
The sovereign fund’s Stable unit received an allotment of 69,44,574 shares, with an amount allocation of INR 750 million, representing 1.89%.
Foreign Institutions that participated in the anchor round include Capital World, Goldman Sachs, GIC, T.Rowe Price, Morgan Stanley, Allianz Global, among others.
Goldman Sachs and the US domiciled New World Fund Inc were the lead investors with over 5% in anchor investor portions.
The INR 100 billion public issue saw an overall subscription of 2.42 times the issue size. The institutional tranche was 3.32 times subscribed and the non-institutional piece 81%. The retail leg was 3.44 times covered.
HDFC Bank, IDBI Capital, IIFL Securities and Nuvama Wealth Management were bookrunners.
(Reporting by Bindu Rai, editing by Seban Scaria)
