NTPC Green Energy has fixed a price band of ₹102-108 per share for its initial public offering (IPO) which will open for subscription on November 19.

The IPO is entirely a fresh issue of up to ₹10,000 crore and trails only Hyundai Motor India and Swiggy in size this year. Investors will have to apply for a minimum of 138 shares and multiples of 138.

The company will use ₹7,500 crore to invest in its wholly owned subsidiary, NTPC Renewable Energy Ltd (NREL), to repay the debt of the subsidiary.

The company’s operational capacity stood at 3,220mw of solar projects and 100mw of wind projects across the six states as of September 30, 2024.

The management said on Wednesday it will invest ₹1 lakh crore in solar and wind assets by 2026-27, with 20 per cent of the sum in equity.

The IPO will contribute ₹10,000 crore, while the rest of equity will be in internal accruals.

NTPC chairman and managing director Gurdeep Singh said the company was upbeat about raising the remaining ₹80,000 crore in debt as it enjoys a very good credit rating from multiple agencies because of its parent NTPC.

The IPO comes as India bets big on renewable power and is ramping up capacity. However, its red-hot IPO market has cooled in the past month due to underwhelming corporate earnings and an exodus of foreign funds.

NTPC Green, which mostly produces solar power and has a few wind energy projects, follows solar panel makers Waaree Energies, Premier Energies and ACME Solar to the stock market this year.

Some analysts flagged concerns over NTPC Green’s valuation, including on a price-to-earnings (PE) basis.

“The issue appears to be steeply priced for a company that trails its peers on various valuation metrics,” said Arun Kejriwal, founder of brokerage Kejriwal Research.

NTPC Green’s PE ratio of 148, based on last fiscal year’s earnings, is higher than its smaller peers but lags bigger rival Adani Green Energy.

The company has reserved ₹200 crore worth of shares for its employees. The eligible employees will get these shares at a discount of ₹5 per share to the final issue price. Another ₹1,000 crore worth of shares are reserved for shareholders.

With inputs from Reuters