5 Upcoming Renewable Energy IPOs to Watch Out

Rising temperatures and the desperate need for sustainable energy solutions have caused the greatest transformation in the energy space.

Renewable energy, once a niche segment of the broader energy industry, is growing rapidly to become an important source of power.

This shift is reflected in the soaring performance of green energy stocks, with many witnessing multibagger returns over the past year.

Some renewable energy stocks, such as Inox Wind Energy and KPI Green Energy, have surged 450-500% over the last year, while more than 15 others have seen returns exceeding 100%.

To reap the benefit of this revolution, many companies are stepping up their efforts to contribute to a more sustainable planet. Several Indian companies are leading their way with green energy.

While current renewable stocks may appear pricey for investors, exciting developments are on the horizon.

The renewable market is anticipated to witness heightened activity with the upcoming five renewable energy IPOs.

#1 NTPC Green Energy

Leading the list is NTPC Green Energy.

NTPC Green Energy is a wholly-owned subsidiary of NTPC Limited, India's largest power company.

The company focuses on accelerating NTPC's renewable energy growth and expanding its green footprint across India and potentially overseas.

NTPC's green energy arm is likely to file a draft red herring prospectus for listing on the bourses by July to go for a Rs 100 bn initial public offering (IPO) by November 2024.

NTPC Green Energy Ltd (NGEL) recently selected investment bankers for the listing.

NTPC Green Energy IPO plans to construct a 60-GW renewable portfolio over the next decade. It plans to develop its non-fossil companies using share sale earnings. The corporation supports the government's 2070 net carbon emission reduction goal.

It is also looking to develop pumped hydro storage and green hydrogen and ammonia manufacturing projects. The company is also working on e-mobility and waste-to-wealth projects.

The primary objective of the Green Energy IPO is to raise funds for NTPC's renewable energy initiatives. The capital generated through the IPO will be channelled into solar, wind, and other clean energy projects, enabling NTPC to diversify its energy portfolio and contribute to India's renewable energy targets.

Petronas had offered to buy the stake at around Rs 40 billion (bn) for NGEL, pipping two other companies for the stake.

This will be the second listing in two years of a government-owned company in the renewable energy sector. Last November, the Indian Renewable Energy Development Agency saw its IPO oversubscribed 38.8 times.

Further, a joint venture deal between NTPC Green Energy and Indian Oil Corporation was struck last in February 2024 to establish renewable energy projects that would fulfil the IOCL Refineries' continuous power needs.

Through the JV, NTPC and IOC would be able to fulfil their respective clean energy objectives in their core industries. The cabinet committee on economic affairs permitted NTPC to spend more in its green energy business, NTPC Green Energy than was allowed in March.

#2 NHPC Renewable Energy

Second on the list is NHPC Renewable Energy.

NHPC Renewable Energy is a subsidiary of NHPC Limited, the largest hydropower producer in India.

NHPC Renewable Energy focuses on developing and managing renewable energy projects in India, primarily concentrating on solar and wind power.

The company is committed to expanding its renewable energy portfolio with a pipeline of over 1,300 MW of solar projects.

NHPC recently announced intentions to boost investments in renewable energy sources, aiming to allocate 80% of its total capital expenditure to the hydro sector and 15-20% to solar and hybrid green energy sectors by the conclusion of FY27, enhancing its subsidiary's growth prospects.

NHPC plans to either take its clean energy subsidiary, NHPC Renewable Energy, public or divest its stake to strategic investors via private placement within the next two to three years, according to Rajendra Prasad Goyal, NHPC's director.

Although no specific details of the IPO have been publicly disclosed, NHPC plans to increase its renewable energy capacity in the future.

#3 SJVN Green Energy

Third on the list is JVN Green Energy.

SJVN Green Energy is a wholly-owned subsidiary of SJVN, a Mini Ratna public sector enterprise under the administrative control of the Ministry of Power, Government of India.

The company works in the verticals of power generation from renewable sources such as solar parks, wind & hybrid projects, battery energy storage systems, and asset creation in wave, biomass, small hydro and green hydrogen-based business ventures.

The company, in April 2024, incorporated a Joint Venture with Assam Power Distribution company named SGEL Assam Renewable Energy Limited issued by the Ministry of Corporate Affairs, Government of India.

The joint venture will carry out business in the field of Power Generation from all renewable energy sources, including Hydro Power, by setting up power plants.

The company in March received a 200 MW solar project in an e-Reverse Auction conducted by Gujarat Urja Vikas Vikas Nigam.

The tentative cost of construction and development is Rs 11 billion (bn).

Apart from that, it received a letter of intent for a 500 MW solar project at Gujarat Industries Power Company Park in Khavda, with an investment of Rs 27 bn.

The project will be developed at Gujarat Industries Power Company Park at Khavda.

SJVN Green Energy currently has 3.6 GW assets in its pipeline, set to be commissioned in the next two years.

However, no official announcements are made by the renewable energy major for IPO.

With plans to invest around Rs 15 bn in renewable capacity addition, the company may consider going public soon.

#4 ONGC Green

Fourth on the list is ONGC Green.

Oil and Natural Gas Corporation (ONGC), the largest crude oil and natural gas company in India, incorporated a wholly owned subsidiary, ONGC Green, on 27 February 2024.

ONGC Green engages in the value-chains of energy business viz. renewable energy, bio-fuels/ bio-gas business, green hydrogen and its derivatives like green ammonia, green methanol, storage, carbon capture utilisation and storage and LNG business.

The company in March approved a Rs 990 m equity investment in its newly created wholly-owned subsidiary ONGC Green.

Its board has given in-principle approval to invest an additional Rs 11 bn in ONGC Green.

It also plans to expand beyond India by exploring opportunities in international renewable energy markets.

ONGC Green might leverage ONGC's existing infrastructure and expertise for efficient project development and management in the renewable energy sector.

These all make ONGC Green a game changer IPO for the Indian market.

While there have been no official announcements regarding an IPO, the company may consider such plans soon.

#5 NLC India Green Energy

Last on the list is NLC India Renewable.

NLC India, a Navaratna Central Public Sector Enterprise (CPSE) under the Ministry of Coal, in October 2023 incorporated a wholly-owned subsidiary, called NLC India Green Energy Limited (NIGEL).

The company will take care of planning and participating in upcoming renewable energy tenders, as well as tendering, execution and commission of renewable energy projects. The subsidiary is expected to achieve 5 GW capacity by 2030 and contribute towards carbon emission reduction.

NLC India Green Energy Limited (NIGEL) has signed the Power Purchase Agreement (PPA) with Gujarat Urja Vikas Nigam Limited (GUVNL) for the proposed 600 MW Solar Power Project at Khavda Solar Park, Gujarat.

The project is expected to offset approximately 35.5 Million Metric Tonnes of carbon dioxide emissions during its lifetime.

The proposed 600 MW solar power project in Khavda Solar Park will be the single largest solar project developed by NLCIL as of date.

NIGEL has set an ambitious target for itself: to institute RE projects amounting to a capacity of 6 GW by the year 2030.

In line with this goal, projects aggregating 2 GW are currently under development in various regions across India.

The company has not made any official announcements about an IPO; however, it could be on the horizon.

Conclusion

India ranks third globally in energy consumption and fourth in installed renewable energy capacity, which includes sources like solar, wind, hydro, and geothermal power.

As of March 2024, India has 190.57 GW of renewable capacity, including 45.88 GW from wind, 81.81 GW from solar, 10.35 GW from co-generation, 5 GW from small hydropower, 0.58 GW from waste to energy, and 46.92 GW from large hydro.

The Indian government, through the Ministry of New and Renewable Energy, aims to reach a renewable energy production capacity of 500 GW by 2030.

This initiative is set to boost industry growth and foster increased investment in sustainable energy.

To support this goal, the government has introduced initiatives like the National Green Hydrogen Mission, the Production Linked Incentive Scheme for High-Efficiency Solar PV Modules, and the Carbon Credit Trading Scheme.

With many exciting players emerging, it's a fantastic time to explore your options before picking your champion.

Nevertheless, it is always prudent to conduct thorough research before making any investment decisions.

Ensure that the investment aligns with your financial objectives and matches your risk tolerance level.

For more information on IPOs, check out the list of upcoming IPOs.

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