The government will sell a 5 per cent stake in NTPC, India’s largest power producer, on Tuesday at a floor price of Rs. 122 per share to raise Rs. 5,029 crore.
The stake sale would be spread over two days with institutional bidders getting the first chance to buy shares on Tuesday. Retails investors, for whom 20 per cent shares have been reserved, will get to bid on February 24.
The floor price of Rs. 122 apiece is at a 3.82 per cent discount to Monday’s closing price of Rs. 126.85.
“The floor price for the offer shall be Rs. 122 per equity share,” NTPC said in a regulatory filing.
A total of 41.22 crore shares or 5 per cent in NTPC could fetch Rs. 5,029 crore to the exchequer at the floor price of Rs.121 apiece.
NTPC is the first company to hit the markets under the revised offer for sale (OFS) guidelines of market regulator Sebi (Securities and Exchange Board of India). The OFS route has now been spread over two days. The bidding would remain open from 0915-1530 hours on both the days.
“Retail investors shall be allowed to place their bids only on the T+1 day. Further, those non-Retail investors who have placed their bids on T day and have chosen to carry forward their bids to T+1 day, shall be allowed to revise their bids on T+1 day as per the SEBI OFS Circulars,” NTPC said.
The allocation shall be at or above the floor price on price priority basis at multiple clearing prices.
However, allocation to retail investors, who have the option to bid at the cut off price, can be below the floor price on account of retail discount offered, it added.
A 5 per cent additional discount would be offered to retail investors, which are those who bid for shares worth not more than Rs. 2 lakh.
The Cabinet in May had approved the 5 per cent stake sale in NTPC. The government holds 74.96 per cent in the firm.
It had last sold stake in NTPC in February 2013.
NTPC would be the sixth PSU to hit markets in the current fiscal. The disinvestment department has held roadshows in Singapore, Hong Kong, London and in the US.
So far this fiscal year, the government has raised over Rs.13,300 crore through disinvestment in five PSUs — EIL, Indian Oil Corp, PFC, REC and Dredging Corporation. This is against a target of Rs. 69,500 crore for 2015-16.
Volatile market conditions have affected the government’s disinvestment plan, which mostly have commodity and oil stocks in the pipeline.
The Sensex has plunged over 15 per cent this fiscal year on various global factors including slowdown in the US and China as well as uncertainties in the Eurozone