Sebi Approves NTPC Green Energy and Avanse Financial Services to List Their IPOs

Nitin Konde, Varun Bhardwaj

Oct 30, 2024 — 2 min read

SEBI Approves NTPC Green & Avanse Financial Services IPOs for Launch

According to an update with the markets regulator on October 28, 2024, Sebi has given the go-ahead for NTPC Green Energy, the company's renewable energy division, and Avanse Financial Services Ltd, an NBFC with an emphasis on education, to raise money through initial public offerings (IPOs).

Through first share offerings, NTPC Green Energy and Avanse Financial Services hope to raise INR 10,000 crore and INR 3,500 crore, respectively. According to a media report, the two businesses who submitted their initial public offerings (IPO) documents to Sebi between July and September received their observations on October 22 and 23. In Sebi's terminology, obtaining observations signifies that the public issue is now to be floated. According to the draft red herring prospectus (DRHP), NTPC Green Energy's first share offering is a complete new issuance of equity shares without an offer-for-sale (OFS) component.

How Companies Are Planning to Utilise the Amount?

In addition to using a portion for general corporate purposes, INR 7,500 crore of the total revenues will be utilised to repay or retire all or a portion of the existing loans owed by its subsidiary NTPC Renewable Energy Ltd. (NREL). Spread throughout more than six states, NTPC Green Energy is a central public sector organisation known as "Maharatna" that specialises in renewable energy, including wind and solar generating assets.

According to the DRHP, the proposed IPO by Avanse Financial Services includes a new offering of equity shares up to INR 1,000 crore and OFS up to INR 2,500 crore by the selling stockholders. The business, which is supported by Olive Vine Investment Ltd., a division of Warburg Pincus, a prominent private equity firm, plans to use the money to expand its capital base in order to meet future demands.

Olive Vine Investment, Kedaara Capital Growth Fund III LLP, and International Finance Corporation (IFC) would all sell shares valued at INR 1,758 crore, INR 400 crore, and INR 342 crore, respectively, as part of the OFS. However, on October 23, VMS TMT withdrew its draft IPO documents. Early in October, the regulator got the company's draft IPO paperwork.

Avanse Financial Services

The non-banking financial enterprise Avanse Financial Services, which focuses on education, intends to raise INR 3,500 crore to increase its capital base in order to fulfil its future capital needs. The second-biggest NBFC in India with an emphasis on education is Avanse Financial Services. Among Indian NBFCs with an emphasis on education, it also had the second-highest payouts in FY23 and the second-highest earnings in FY24.

With products ranging from student education loans to expansion capital for educational institutions through education infrastructure loans, the organisation provides a full-stack education offering. For Indian professionals and students selected to study abroad or at domestic universities, it offers loans and other value-added services. Additionally, it offers private educational institutes in India finances backed by collateral.