Another government company is gearing up to raise a substantial amount of funds from the equity market. The company is all set to go for an IPO and has filed a draft red herring prospectus (DRHP) with SEBI for the same. The company has stated that the first share sale will be a fresh issue and there will be no offer for sale (OFS). The company will use the funds raised from the IPO to raise debt and achieve other corporate objectives.
This is NTPC Green Energy Limited, the green energy arm of the government company NTPC. NTPC will raise Rs 1 lakh crore through the IPO of Green Energy Limited. If a retail investor holds shares of NTPC Limited, he can get more benefits during the issue auction. At the same time, NTPC Green Energy can also bring benefits to employees.
The chances of getting IPO allotment will increase
In simple terms, retail investors can invest up to Rs 2 lakh in the IPO. However, if you own NTPC shares, then you can also bid under the Rs 2 lakh equity category. So, the maximum limit becomes Rs 400 crore.
NTPC Green Energy employees can get more benefits if they hold shares in its parent company. They can bid under shareholder, eligible employee and retail categories, with a total amount of Rs 600 crore. Not only that, the chances of getting rights issue in this IPO will also increase.
But it is worth noting that the person must be a shareholder of the company before the NTPC unit submits the draft documents to market regulator SEBI.
235 companies have launched IPOs
The issue will be book-managed by a team of lead managers including IDBI Capital Markets & Securities, HDFC Bank, IIFL Securities and Nuvama Wealth Management. Meanwhile, NTPC share price rose 4.35% today to a record high of Rs 431.85. The stock eventually closed at Rs 424, up 2.45%. Let us tell you that so far this year, around 235 companies have raised more than Rs 71,000 crore.
(Note – always seek help from a financial advisor before investing in any company.)
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