Sunday, 24 November 2019

Octopus Renewables IPO

The Octopus Group is one of Europe's largest owners of solar power and globally manages over £3bn of assets in renewable energy. It operates a venture capital arm and also a household energy supply business with over 1 million UK customers.

With increasing concern about climate change in recent times from public, pension funds and other institutional fund managers, there is a growing demand for climate-friendly investment options and the renewables infrastructure sector has seen over £1bn of new capital invested in the first half of 2019 with several new trusts being launched as well as expansion of existing trusts. Most of these trusts trade at a significant premium to net assets - average around 12% to 14%.

So, tapping into this market is a natural step for Octopus Renewables (ORIT) who hope to raise an initial £250 million from mainly institutional investors however the IPO is also available for retail investors via most of the popular brokers. I have applied for some shares in my ISA with AJ Bell Youinvest.

The proceeds from the launch will be invested in mainly onshore wind and solar renewables throughout the UK and Europe and also Australia. The dividend will be paid quarterly and is expected to be 3% for the first year and 5% when fully invested with a target for total return of 7 to 8% p.a. Here's the link from AJ Bell for further details.

One of the advantage of acquiring shares via an IPO is there are no dealing charges or stamp duty, therefore a saving of around 1%. The offer closes on 5th December and the new shares should start trading shortly after this date. The launch costs will be capped at 2% and therefore the shares initial net asset value will be 98p.

As ever, this article is merely a record of my personal investment decisions and should not be regarded as an endorsement or recommendation - always DYOR!


  1. Thanks for this.
    I had seen it but wasn't convinced that I had the money to invest. But I recently sold vcts in octopus after holding for 5 years and was always impressed with the company.

    I missed the trig offering earlier this year and most if these ipos are only open to institutions - so this is a good.chance to avoid stamp duty and any premium.

    1. Good luck GFF and hope it works out OK for you. It's reassuring to know you have been impressed with Octopus over the 5 years as I wasn't really aware of it before now.

  2. I topped up my ISA with some money and placed an order for shares this morning just before the offer closed.
    It should bring in a steady dividend of £200 a year for the future + do some good!

  3. Not sure if you follow the Quoted Data website, but they interviewed the managers of this trust at the end of last week.