NTPC floor price set at Rs 145, a 4.79% discount
The offer for sale (OFS) proposes to sell 78.32 crore shares. At the given floor price, the government could raise at least R11,353 crore — the largest OFS from a state-owned entity in the current fiscal — if the issue is fully-subscribed.
On BSE, NTPC closed 2.12% or R3.30 lower from the previous close of R152.30. The scrip has dropped nearly 10% in the last three months. Post-issue, the government’s holding in NTPC will fall to 75% from the current 84.50%.
In a poll conducted among brokerages and institutions by FE, market experts and analysts recommended subscribing to the issue from a long-term perspective, citing cheaper valuations. Further, likely power sector reforms, the company’s immunity to pricing and coal-linkages with Coal India would set the company in a favourable position, they said.
Citigroup Global Markets, Deutsche Equities, Goldman Sachs, Kotak Securities, Morgan Stanley India and SBI Capital Markets are the lead managers to the NTPC auction.
Last month, a JPMorgan research report gave a ‘neutral’ rating to NTPC. “We stay neutral ahead of imminent disinvestment of 9.5% stake which has contributed to the stock’s recent under-performance.. At 1.5x P/BV, NTPC looks cheap in a historical context and relative to regional utilities.
Assuming the ‘greater good’ (coal price pooling) is inevitable, we see the current price as an attractive entry opportunity,” stated analysts Sumit Kishore and Deepika Mundra in
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