NTPC Green Energy IPO opens on November 19: Here are 11 things to know before you decide to subscribe

NTPC Green Energy Ltd (NGEL), a wholly-owned subsidiary of state-run NTPC Ltd, is hitting the market with its initial public offering (IPO) to raise Rs 5,000 crore. The IPO will open for subscription on November 19 and close on November 21.

Here are 11 things you should know about the NTPC Green Energy IPO before you decide to subscribe:

Objective of the IPO: The company plans to utilize the net proceeds from the IPO to fund capital expenditure requirements, repay or prepay certain outstanding borrowings and for general corporate purposes.
Price band: The price band for the IPO has been fixed at Rs 235-240 per share.
Issue size: The IPO comprises an offer for sale of up to 21,00,00,000 equity shares by the promoter, NTPC Ltd.
Minimum investment: One lot of NGEL comprises 60 shares at a price band of Rs 235-240 each. Retail investors will have to invest a minimum of Rs 14,100 to apply for one lot.
Financials: NGEL reported a loss of Rs 42.82 crore in FY22 compared with a profit of Rs 96.56 crore in FY21. Its revenue from operations stood at Rs 82.58 crore in FY22, up from Rs 33.06 crore in the previous year.
Valuation: At the upper end of the price band, NGEL is valued at around Rs 21,600 crore. The company's P/BV ratio stands at 1.74, which is higher than the industry average of 1.54.
Industry outlook: The Indian renewable energy sector is expected to grow significantly in the coming years, driven by government policies, increasing demand for clean energy and falling technology costs.
Strengths: NGEL has a strong parentage with NTPC Ltd, which is one of the largest power generation companies in India. The company has a healthy order book and a strong pipeline of projects.
Weaknesses: NGEL is a new company with limited operating history and has reported losses in the past. The renewable energy sector is also highly competitive.
Recommendation: The IPO of NGEL is a good investment opportunity for long-term investors with a higher risk appetite. Investors should consider factors such as the company's financial performance, valuation, industry outlook and their own risk tolerance before investing.
Risks: Key risks associated with the IPO include execution of the company's growth strategy, competition from other players in the renewable energy sector and the impact of government policies on the industry.