State-run NTPC's green energy arm, NTPC Green Energy Ltd, has filed its initial public offering (IPO) draft red herring prospectus (DRHP) to raise Rs 10,000 crore. The initial share sale will be an entirely fresh issue with no offer-for-sale (OFS) component. The company said it will use the IPO proceeds to repay debt and general corporate purposes.
If a retail investor is holding an NTPC Ltd share, the person stands to benefit more when the issue opens for bidding. Similarly, it will be more beneficial for NTPC Green Energy's employees.
To put it simply, retail investors can invest a maximum of up to Rs 2 lakhs in an IPO. If you hold an NTPC share, you can bid under the shareholder category of Rs 2 lakh as well, upping the maximum limit to Rs 4 lakh crore.
Employees of NTPC Green Energy who are holding a share of its parent could gain more. They can place bids under shareholder, eligible employee and retail categories, taking the total to Rs 6 lakh crore.
However, it must be noted that an individual must be a shareholder in the books of NTPC before its arm files its draft papers to market regulator Sebi.
The issue will be managed by a team of book-running lead managers, including IDBI Capital Markets & Securities, HDFC Bank, IIFL Securities, and Nuvama Wealth Management, as outlined in the draft documents.
Kranthi Bathini, director of equity strategy at WealthMills Securities, said NTPC Green IPO can attract significant investor interest, especially as green energy remains a key focus in the near term, adding that NTPC's move also signals its intent to diversify earnings by exploring various energy avenues.
India's IPO landscape has been more vibrant this year, with around 235 companies raising over Rs 71,000 crore so far.
Meanwhile, NTPC shares jumped 4.35 per cent today to hit a record high of Rs 431.85. The stock eventually settled 2.45 per cent higher at Rs 424.