NTPC shares fall 3% as government’s Rs 7,000-14,000 crore OFS stake sale begins

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Updated: August 29, 2017 10:49:13 AM

The two-day OFS would open for institutional investors today and retail investors would get to bid on August 30.

Government will sell up to 10 per cent stake in NTPC at a floor price of Rs 168 per share through a two-day offer-for-sale (OFS) beginning today. (Express Image)

The shares of NTPC were trading down by 3.29% on Tuesday morning at Rs 167.6, after government’s stake sale via a two-day offer-for-sale (OFS) at a floor price of Rs 168 per share began today. India’s government said it will sell a 5 percent stake in top power producer NTPC Ltd through a stock market auction, with a greenshoe option to sell another 5 percent in a deal that could raise up to $2.2 billion. The sale of 41.23 crore shares would fetch about Rs 7,000 crore to the exchequer.

The two-day OFS would open for institutional investors today and retail investors would get to bid on August 30. A retail investor is defined as the one who place bids for shares not more than Rs 2 lakh.

The offer shall take place during trading hours on a separate window of the stock exchanges on T day ie August 29, 2017 commencing at 9:15 am and shall close on the same date at 3:30 p.m.

Non-retail Investors who have placed their bids on T day and have chosen to carry forward their bids to T+1 day, shall be allowed to carry forward and also revise their bids on T+1 day as per the Sebi OFS circulars.

The share sale is organised with the intention to meet India’s fiscal deficit target of 3.2 percent of gross domestic product.The government aims to raise 725 billion rupees ($11.4 billion) through stake sales during the year to March 2018, and has raised about 93 billion rupees from such divestments so far. 

The success of NTPC OFS 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 stake in Larsen & Toubro-owned through Specified Undertaking of the Unit Trust of India (Suuti) fetched Rs 4,153 crore.

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