This steep decline coincided with the expiration of the three-month lock-in period for anchor investors, raising concerns about potential sell-offs. Despite NTPC retaining an 89% stake in NGEL, the release of 183.3 million shares (2% of the company’s equity) into the open market triggered panic among investors.
NGEL’s market performance since its initial public offering (IPO) has been anything but stellar. After debuting on 27 November at ₹111.50 a share, a modest 3% premium, it has consistently traded below its IPO price of ₹108 since 11 February. The stock is currently down 38% from its 52-week high of ₹155, which it touched in early December. Bearish sentiment in the broader public-sector space and the overall market has only exacerbated the situation.
A leader in India’s renewable revolution
NTPC Green Energy Ltd was incorporated in 2022 as the renewable-energy arm of NTPC Ltd, India’s largest power producer. With the goal of spearheading India’s transition towards clean energy, NGEL has a diversified portfolio spanning solar, wind, and hybrid renewable energy projects. The company is a ‘Maharatna’ public-sector enterprise and is currently one of the top renewable players in India, operating across several states to optimise its use of resources.
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NGEL’s business is built on long-term power purchase agreements (PPAs), which ensure stable cash flows and predictable revenues. The company benefits from NTPC’s extensive operational experience, allowing it to scale projects efficiently while minimising risks associated with renewable energy generation. The company also has strong backing from the government, which has set an ambitious target of achieving 500GW of non-fossil fuel capacity by 2030.
Growth amid margin compression
Despite its volatile stock, NGEL’s financial results reflect steady growth. The company posted a remarkable 52.3% rise in standalone net profit for Q3FY25 to ₹89.4 crore, from ₹58.7 crore a year earlier. Revenue from operations grew by 4.1% to ₹460.9 crore, driven by the expansion of its renewable energy capacity. However, a 2.3% decline in Ebitda and shrinking margins — from 88.9% in Q3 FY24 to 83.5% in Q3 FY25 — highlight cost pressures and operational inefficiencies.
Of the company’s ₹10,000 crore IPO proceeds, ₹4,150 crore has been strategically allocated to debt repayment and capacity expansion, while the rest is in fixed deposits.
Strategic partnerships and expansion plans
To expand its renewable-energy footprint, NGEL has been aggressively forming strategic partnerships and securing large-scale projects. One of its most significant moves has been signing a memorandum of understanding (MoU) with Madhya Pradesh Power Generating Company Ltd (MPPGCL) to develop renewable energy projects totaling 20GW. This aligns with India’s broader clean energy transition goals and paves the way for extensive solar and wind installations in the region.
NGEL has also joined forces with Andhra Pradesh’s New & Renewable Energy Development Corporation to form a 50:50 joint venture called AP NGEL Harit Amrit Ltd. This venture aims to develop 25GW of renewable-energy projects including solar, wind and green hydrogen initiatives. By focusing on large-scale energy projects across multiple states, NGEL is securing its position as a major player in India’s renewable energy sector.
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NGEL’s focus on green hydrogen is another key strategic move. Its collaboration with Bharat Light and Power (BLP) seeks to accelerate green hydrogen production and carbon capture projects. This initiative will play a crucial role in India’s commitment to achieving net-zero emissions by 2070.
In January, NGEL also laid the foundation stone for a massive green hydrogen hub in Pudimadaka, Andhra Pradesh, with an estimated investment of ₹1.85 trillion. This project is expected to revolutionise India’s hydrogen economy, reducing reliance on fossil fuels and creating new job opportunities.
ONGC-NTPC green energy deal
In one of the largest renewable energy acquisitions in India, NGEL and ONGC Green Limited bought Ayana Renewable Power for ₹19,500 crore. This deal significantly enhances NGEL’s renewable energy portfolio, adding 4.1GW of operational and under-construction assets. Ayana Renewable Power, established in 2018 and backed by British International Investment and India’s National Investment and Infrastructure Fund (NIIF), has a strong reputation for developing large-scale solar and wind energy projects. By integrating Ayana’s assets, NGEL is accelerating its expansion while leveraging synergies in technology and operations.
The Ayana acquisition positions NGEL among India’s top renewable energy players, alongside Adani Green Energy, Tata Power Renewables and ReNew Power. With Ayana’s well-established contracts and resource-rich project locations, NGEL is poised to achieve its target of reaching 60GW of renewable capacity by 2032.
Upcoming projects and growth outlook
NGEL has an ambitious pipeline of projects that could drive its next phase of growth. Recently, its subsidiary NTPC Renewable Energy Ltd (NTPC REL) secured a 300MW solar project from NHPC and a 1.000MW solar project from Uttar Pradesh Power Corporation Ltd (UPPCL). These wins reinforce NGEL’s reputation as a dominant force in India’s solar energy sector.
NGEL is also investing in large-scale battery storage and hybrid renewable projects. The integration of energy storage solutions into its solar and wind projects will improve energy reliability and support India’s transition to a decentralised power grid. With government incentives, declining solar module costs, and rising hybrid energy tariffs, NGEL is well-positioned to capitalise on the growing demand for clean energy.
Challenges and the road ahead
Despite its impressive expansion, NGEL faces several challenges. Investor sentiment remains weak, with the stock struggling to stabilise since listing. One of NGEL’s biggest hurdles is managing operational costs and maintaining profitability. The company’s Ebitda margins have been under pressure because of rising project costs and efficiency concerns. Scaling operations while keeping costs in check will be critical to ensuring sustained profitability and investor confidence.
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Additionally, NGEL faces increasing competition from private companies such as Adani Green, Tata Power Renewables and ReNew Power. To maintain its edge, NGEL must continuously innovate, expand its project pipeline, and leverage government support for policy-driven growth.
A renewable giant in the making?
NTPC Green Energy has all the ingredients needed to become a renewable energy powerhouse. Backed by NTPC’s experience, strong government policies, and a growing portfolio of clean energy projects, the company is poised for long-term success. However, its stock is yet to reflect its growth potential.
As NGEL navigates market challenges, long-term investors may see an opportunity in its ambitious clean energy journey. The coming years will be crucial in determining whether NGEL can translate its large-scale investments into sustainable financial returns. For now, it stands at a crossroads — balancing investor expectations, project execution, and industry competition while aiming to lead India’s renewable energy transformation.
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About the author: Suchitra Mandal is a proficient financial writer with expertise in delivering well-researched insights and detailed analyses of companies’ performance and market trends.
Disclosure: The author does not hold any shares of NTPC Green Energy at the time of writing this article. The views expressed are for informational purposes only and should not be considered investment advice. Readers are encouraged to conduct their own research and consult a financial professional before making any investment decisions.
