NTPC's shares fly off the shelves
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The 412 million shares, worth around Rs 5,000 crore, put on the block by the government in power utility NTPC have been fully subscribed.
The offer for sale (OFS) has so far seen (as of 11:45 am) 432 million bids — 1.3 times shares on offer. The indicative price, or the price at which most bids were received, was Rs 122.05 compared to the floor price of Rs 122 per share, data provided by the BSE showed.
Shares of the company were trading at Rs 124.5, down 1.85% on the BSE.
The government is divesting 5% stake in NTPC as a part of the 2015-16 disinvestment programme. The Centre currently holds 74.96% stake in the power utility. Around 20% of the share sale is reserved for retail investors (those investing up to Rs 2 lakh). The retail portion will be auctioned on Wednesday.
Only non-retail-institutional investors and high net worth individuals were rallowed to place bids today.
NTPC's stake sale follows the huge successful divestment in Engineers India late-January. So far, this fiscal, the government has divested stake in five companies and has raised a cumulative Rs 13,300 crore.
NTPC's share sale will be the second-biggest divestment this fiscal after Indian Oil Corporation, which had helped the government mop up over Rs 9,370 crore.
SBI Cap Securities, ICICI Securities, Edelweiss Securities and Deutsche Equities are the investment bankers handling the share sale.
Shares of NTPC are over 13% so far this year. The 12-month price target on NTPC is Rs 158, as per the consensus analysts estimates provided by Bloomberg. The stock has total 28 'buy' recommendations and five 'sell'. NTPC trades at 10.5 times its estimated 12 month earnings and offers a dividend yield of around 2.6%.
Retail investors are being offered a 5% discount in the OFS on allotment price. Non-retail investors will have an option of carrying forward their bids. In an event of shortfall in retail bids and oversubscription in non-retail bids, investors who have carried forward their bids will get a chance of allotment.
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