The retail portion of the government’s up to Rs 14,000 crore stake sale in nation’s biggest power producer NTPC got fully subscribed at the close of the issue on Wednesday. NTPC’s OFS (offer for sale) for retail buyers was subscribed 103% of the base issue on the second day of the sale as investors bid for 8.45 crore shares till the closing of the issue, according to stock exchange data. This was 1.03 times of the 8.24 crore shares reserved for them. Shares of NTPC ended 0.3% lower on Wednesday at Rs 168 on BSE.
The government intended to sell over 41.22 crore shares, or 5% equity in NTPC at a floor price of Rs 168 per share, through the two-day offer for sale (OFS), with a greenshoe option to sell a further 5% equity in case of over-subscription. The share sale at the floor price of Rs 168 and a 5% stake sale would fetch Rs 7,000 crore to the exchequer. Yesterday, the OFS was subscribed 1.41 times of the total 32.98 crore shares reserved for non-retail investors on the first day of bidding. However, NTPC shares were the biggest loser on the benchmark Sensex yesterday, falling as much as 2.8% to close at Rs 168.5 on the BSE.
According to the offer document, the company employees would be eligible to apply for shares up to Rs 2 lakh each only.
The government has so far this fiscal raised over Rs 8,800 crore through disinvestment in six companies, including selling a stake in L&T through Specified Undertaking of Unit Trust of India (SUUTI), and one share buyback. This is against Rs 72,500 crore targeted to be raised in 2017-18 through stake sale in PSUs. This includes Rs 46,500 crore from minority stake sale, Rs 15,000 crore from strategic disinvestment and Rs 11,000 crore from a listing of PSU insurance companies.
The success of NTPC offer for sale would be crucial for helping the government in meeting its ambitious divestment target for the financial year. While the initial share sales in Housing and Urban Development Corporation and Cochin Shipyard fetched Rs 1,207 and Rs 470 crore, respectively, the sale of a stake in Larsen & Toubro-owned through Specified Undertaking of the Unit Trust of India (SUUTI) fetched Rs 4,153 crore.