Narendra Modi government sells 7 pct NTPC stake to raise Rs 9,100 cr

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Published: August 31, 2017 2:59:44 AM

The government has received bids for 7% stake in the country’s largest power producer NTPC, which will fetch about Rs 9,100 crore to the exchequer.

NTPC, exchequer, government, Narendra ModiThe government has received bids for 7% stake in the country’s largest power producer NTPC, which will fetch about Rs 9,100 crore to the exchequer.(Image: Reuters)

The government has received bids for 7% stake in the country’s largest power producer NTPC, which will fetch about Rs 9,100 crore to the exchequer.
At the end of the two-day offer for sale (OFS) on Wednesday, the government retained over-subscription it had received from institutional investors after retail investors bid for only 73% of the quota allocated for them. The retail portion of the offer for sale was 72% subscribed that amounted to Rs 1,340 crore a senior finance ministry official said. The government held a 69.74% stake in NTPC as of June 30, data from stock exchanges showed.
The government had planned to sell over 41.22 crore shares, or 5% holding, through the two-day OFS, with an option to retain a similar portion in case of over-subscription.

The floor price for the shares is Rs 168 and the total number of shares on sale is 41.22 crore or 5% holding with an option to retain a similar portion in case of over-subscription. The stock ended Wednesday’s session 0.3% lower at Rs 168 on BSE. On an opening day on Tuesday, the OFS was subscribed by 1.41 times by non-retail investors on Tuesday, the first day of the offer. Investors bid for 46.35 crore shares against 32.98 crore shares on offer, according to stock exchange data. A total of 5.8 lakh shares was traded on the two main exchanges — Bombay Stock Exchange and National Stock Exchange — and the volume was 1.18 times higher than average daily volumes in six months.

As of June 2017, the government holds 69.74% stake in the company. In 2017 so far, the stock appreciated by 2.31% against Sensex’s gain of 17.88%.
NTPC is engaged in the generation and sale of electricity. The government hopes to raise Rs 72,500 crore in FY18 through a combination of minority stake sales, strategic disinvestments and through the listing of state-owned insurance companies.

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