NTPC Green valued at Rs 78,400 crore by Goldman Sachs; brokerage maintains 'buy' on NTPC with Rs 430 target

Within PSUs, one of the top-performing spaces of the year, NTPC shares have rewarded investors with a return of 79 per cent in the past year, and counting. Is it a good time to enter the stock, which is up about 38 per cent so far in 2024 already? Goldman Sachs has maintained a 'buy' rating on NTPC, valuing it at Rs 4,17,300 crore and its IPO-bound wholly-owned subsidiary NTPC Green Energy at Rs 78,400 crore. 

Here are 10 things to know about this development:

• Mega IPO: NTPC Green Energy is planning to launch what could be the biggest IPO of 2024 so far, at Rs 10,000 crore comprising fresh issuance of shares. 
• Second largest PSU IPO after LIC: At Rs 10,000 crore, such an IPO will be the second biggest by a PSU in the country since LIC's in 2022. 
• Financials: The renewables firm has annual revenue of about Rs 2,000 crore with growth in FY24 recorded at 47 per cent. For the year ended March 31, the company registered a net profit of Rs 344.7 crore over revenue of Rs 1,962.6 crore. Its net debt stood at Rs 12,324.6 crore, and cash and cash equivalents at Rs 115.6 crore, as of March 31, according to the DRHP. 
• According to Goldman Sachs, NTPC Green's profits are in line with its estimates.
• The primary issuance will lead to a dilution of 13 per cent of NTPC's stake in NTPC Green Energy, according to the brokerage. 
• IPO timing: The IPO is expected to hit the Street in the first week of November, according to Zee Business research. 
• Fund utilisation: Out of the proceeds, NTPC Green Energy plans to use Rs 7,500 crore towards debt repayment, and the reminder for general corporate purposes. 
• Are you an NTPC shareholder? The planned IPO will have a special quota reserved for NTPC shareholders, which means that even one share held in NTPC can increase the applicant's chances of winning allotment in the primary market issue. 
• What is NTPC Green Energy and what does it do? Established in 2022, NTPC Green Energy handles the renewables business of its parent. 
• Capacity: Currently, NTPC Green has a capacity of 3 GW with plans to take it to 20 GW by FY27 and 60 GW by 2032. 

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