The initial public offering (IPO) of NTPC Green Energy Limited, launched on November 19, 2024, has garnered a subscription of 33% on its opening day. The state-owned renewable energy company aims to raise ₹10,000 crore through the public issue, which involves a fresh issue of 92.59 crore shares. The IPO, priced between ₹102 and ₹108 per share, will close for subscription on November 22, 2024.
Subscription Details:-
On the first day, retail investors showed strong interest, subscribing to the IPO 1.33 times the shares available for their category. Non-Institutional Investors (NIIs) followed with a 16% subscription of their allocated shares. However, Qualified Institutional Buyers (QIBs) did not participate on Day 1, as per the Bombay Stock Exchange (BSE) data.
Will the Shareholder Quota Improve Your Chances of Allotment?
The introduction of the shareholder quota has generated considerable interest among investors, with many rushing to purchase NTPC shares in hopes of qualifying for this category. Experts suggest that applying under the shareholder quota could improve the chances of receiving an allotment, as it provides multiple opportunities to apply (shareholder, retail, or non-institutional categories). However, it is important to note that while the shareholder quota may increase the likelihood of allotment, it does not guarantee success.
In the event of an oversubscription, including in the shareholder category, the allotment will be determined on a proportionate basis, as outlined in the NTPC Green Energy IPO's RHP. This means that if demand exceeds the number of shares available, applicants will receive shares in proportion to their bids.
Overall, while applying under the shareholder quota can provide some advantages, the final allotment will depend on the total demand for the IPO and the number of applications received. If the IPO is oversubscribed multiple times, competition for allotment will increase, and shares will be allocated accordingly.
Anchor Investors’ Participation:-
Ahead of the public offer, NTPC Green Energy raised ₹3,960 crore in its anchor investment round on November 18. The company's price band for the IPO has been set between ₹102 and ₹108 per share, with a face value of ₹10. Investors can bid for a minimum lot size of 138 shares.
Grey Market Premium (GMP):-
As of November 19, the IPO is trading at a grey market premium (GMP) of ₹1.15 per share. This suggests that investors are willing to pay a premium for the issue, with shares expected to list at ₹109.15, reflecting a 1.06% premium over the upper price band.
Our Outlook:-
The initial response from retail investors indicates strong demand, though institutional participation remains to be seen in the coming days. The subscription rate is expected to pick up as the IPO nears its closing date on November 22.