The government will sell 5% stake in the country’s largest power producer, NTPC, on Tuesday at a floor price of R122 per share to raise around Rs 5,029 crore. The stake sale will be done via offer for sale (OFS), the company said in a filing with the stock exchanges.
The government currently owns 74.96% stake in the company.
NTPC stake sale would be the first issue under the tweaked OFS regulations. The Securities & Exchange Board of India (Sebi) released new OFS regulations last week.
As per the new regulations, institutional investors and retail investors would send their bids on two different days.
While non-retail investors will bid on the transaction day (T), bids from retail investors will be allowed only on T+1 day.
Further, non-retail investors who have placed their bids on T day and have chosen to carry forward their bids to T+1 day will be allowed to revise their bids on T+1 day.
In case of NTPC, bids from non-retail investors will be accepted on Tuesday, while retail bids will be received on Wednesday. More than 41.2 crore shares are on offer and the bidding will open from 9:15 am to 3:30 pm on both the days.
Shares of NTPC declined nearly 2% on Monday to close at Rs 126.8 on the BSE. The floor price fixed for the OFS is at 3.8% discount to Monday’s closing price.
The OFS is part of the government’s push to raise more funds through disinvestment. The FY16 Budget outlined a disinvestment target of Rs 69,500 crore for the current fiscal year, of which Rs 41,000 crore would be through regular stake sales and Rs 28,500 crore via strategic disposals.
Engineers India was the last public sector company to go for an OFS. The government had divested 10% of its stake in Engineers India to raise more than Rs 600 crore, stock exchanges data showed.