NTPC Green Energy share price drops 9% as 3-month IPO lock-in period ends today

Stock market today: Shares of NTPC Green Energy, a wholly owned subsidiary of NTPC Limited that recently debuted on Dalal Street, came under selling pressure in Monday’s session, February 24, falling 9% to ₹96.20 apiece as the supply of shares in the secondary market spiked with the expiration of the three-month shareholder lock-in period.

The lock-in period for pre-IPO investors who had invested in the company before its public listing in November 2024 ended today, making up to 18.33 crore equity shares eligible for sale.

A lock-in period in an Initial Public Offering (IPO) refers to a predetermined timeframe during which certain shareholders—often including the company, promoters, and pre-IPO investors—are restricted from selling their shares in the open market.

This restriction aims to provide stability to the newly-listed company’s stock price and boost investor confidence during the early stages of trading. Lock-in periods vary in duration, ranging from a few months to several years, depending on stock exchange regulations and the terms set by the company and its underwriters.

As the lock-in period expires, restricted shareholders become eligible to trade their shares in the secondary market, potentially increasing liquidity. However, there is a risk that some shareholders may immediately offload their holdings, adding downward pressure to the stock price.

Meanwhile, the company’s shares debuted on Dalal Street on November 27 at ₹121.70, compared to the IPO price of ₹108. The stock initially maintained its upward momentum, reaching an all-time high of ₹155.35 apiece. However, the rally lost steam in subsequent months, and the stock continued to decline, hitting today’s low of ₹96.20.

At current levels, the stock is trading at a 21% discount to its listing price of ₹121.70 and 11% lower than its IPO price of ₹108. Despite the recent weakness, analysts remain bullish on the stock, citing NTPC Green Energy’s strong fundamentals and solid positioning within India’s renewable energy sector.

Recent developments

The company, on February 20, signed a Memorandum of Understanding (MoU) with Bharat Light and Power Private Limited (BLP) to accelerate green energy objectives and support the Government of India’s efforts toward a carbon-neutral economy.

On February 12, ONGC NTPC Green Private Limited (ONGPL), a 50:50 joint venture between ONGC Green Limited (OGL) and NTPC Green Energy Limited (NGEL), signed a Share Purchase Agreement (SPA) with National Investment and Infrastructure Fund (NIIF), BII South Asia Renewables Limited, British International Investment Plc (BII), and Eversource Capital to acquire a 100% equity stake in Ayana Renewable Power Private Limited (Ayana) for an enterprise value of ₹195 billion (USD 2.3 billion), as per the company’s filing.

Looking at the company’s fundamentals, the company for the December-ending quarter reported a net profit of ₹66 crore as compared to a net profit of ₹56 crore in the same period last year, while the revenue from operations rose by 13.2% YoY to ₹505 crore.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.