NTPC Green Energy urges Sebi to expedite approval for Rs 10K crore IPO

State-owned power generator also seeking leeway on certain listing regulations

NTPC Green Energy has nudged market regulator Securities and Exchange Board of India (Sebi) to expedite the approval of its Rs 10,000-crore initial public offering (IPO), said people in the know.

The wholly-owned subsidiary of the country’s largest power generating company NTPC had filed its draft red herring prospectus (DRHP) with Sebi last week.

Typically, the regulator takes between 2 and 4 months to vet and give its final observations on a DRHP. As a result, the timeline between initial filing and IPO launch stretches to over six months in most cases.

However, eyeing a late-October to early-November IPO launch, investment bankers managing the offering are seeking Sebi's approval within a month, said sources.

An email sent to spokesperson of NTPC Ltd remained unanswered till the time of going to press.

Industry players believe swift Sebi approval will enable NTPC Green to capitalise on the current market optimism. This buoyancy has already facilitated nearly two dozen companies to raise Rs 30,000 crore through IPOs since August.

“The market environment is ideal for large public offerings like NTPC Green's, and the sentiment towards public sector undertakings (PSUs) is particularly positive. Anyone would want to launch their issue now before things take a turn for the worse,” said a banker.

The Nifty PSE index has gained 40 per cent so far this year, outperforming the Nifty 50 index which is up around 20 per cent.

Under the regulations, Sebi can issue its observations within 30 days of the filing of the offer document if certain conditions are met.

Investment bankers, other regulators or agencies have to satisfactorily reply to any clarification or give additional information as sought by Sebi.

Legal experts say that to obtain Sebi’s approval, a company needs to keep its DRHP in public domain for at least 21 days to receive public comments.

An investment banker handling the IPO said NTPC Green is likely to secure expedited approval unless Sebi raises significant concerns.

In 2022, Sebi had cleared Life Insurance Corporation’s (LIC’s) Rs 20,557-crore IPO — the country’s largest-ever, in 24 calendar days.

If successful, NTPC Green’s IPO will be the biggest by a PSU since LIC’s.

NTPC Green’s IPO is entirely a fresh fundraise of Rs 10,000 crore and parent NTPC is not divesting any stake through the IPO.

Beyond expedited approval, the clean power generator is also seeking waivers or flexibility from Sebi on certain regulatory provisions. These are around board composition, appointment of independent directors and constitution of committees.

NTPC Green filed an application with Sebi on September 18 in this regard, according to its DRHP.

Even LIC had obtained special dispensations from Sebi at the time of its IPO. These include relaxation around minimum public offer requirements and longer timelines for achieving the 25 per cent minimum public shareholding requirement.