Share price of NTPC Green Energy drops 9% as pre-IPO lock-in period expires

Market Performance

Shares of NTPC Green Energy, a wholly owned subsidiary of NTPC Limited, declined by 9% on February 24, 2025, reaching a price of ₹96.20. The decrease coincided with the expiration of the three-month lock-in period for pre-IPO investors, allowing up to 18.33 crore shares to become eligible for sale in the secondary market.

Lock-In Period and Market Impact

A lock-in period in an Initial Public Offering (IPO) is when specific shareholders, including promoters pre-IPO investors are prohibited from selling their shares. This restriction is intended to stabilize the stock price and maintain investor confidence during the early trading stages. The expiration of such periods can lead to increased liquidity in the stock but may also contribute to selling pressure, influencing price movements.

NTPC Green Energy shares debuted on November 27, 2024, at ₹121.70, higher than the IPO price ₹108. The stock initially surged, reaching an all-time high of ₹155.35 per share. However, it experienced a downward trend, reaching ₹96.20 in the latest trading session.

Company Developments

Recent Agreements

On February 20, 2025, NTPC Green Energy signed a Memorandum of Understanding (MoU) with Bharat Light and Power Private Limited (BLP) to advance green energy initiatives that align with India's carbon-neutral goals.

Additionally, on February 12, ONGC NTPC Green Private Limited (ONGPL), a joint venture between ONGC Green Limited (OGL) and NTPC Green Energy Limited (NGEL), entered a Share Purchase Agreement with the National Investment and Infrastructure Fund (NIIF), BII South Asia Renewables Limited, British International Investment Plc (BII), and Eversource Capital. This agreement facilitated the acquisition of a 100% equity stake in Ayana Renewable Power Private Limited for an enterprise value of ₹195 billion (USD 2.3 billion).

Financial Performance

For the quarter ending December 2024, NTPC Green Energy reported the following financial data:

• Revenue: ₹505 crore, reflecting a 13.2% year-on-year (YoY) increase.
• Net Profit: ₹66 crore, compared to ₹56 crore in the same period last year.

Summary

The decline in NTPC Green Energy's share price aligns with the expiration of the pre-IPO lock-in period, making many shares available for trading. Despite this short-term market movement, the company continues to expand its renewable energy portfolio through strategic partnerships and acquisitions. Its recent financial results indicate growth in revenue and net Profit, reflecting operational stability.