NTPC privatisation being fast-tracked for early Feb

The National Thermal Power Corp, India's biggest power producer, is expected to file a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India today for its follow-up public offer, which is expected to hit the market in the first week of February.

Big-ticket sales of part of the government's stake in public sector enterprises next fiscal would include Steel Authority of India Ltd, Coal India Ltd, and probably Bharat Sanchar Nigam Ltd. The public issue of Rural Electrification Corporation will hit the market just before the budget, while that of National Mineral Development Corp would be around 9-10 March, reports CNBC-TV18.

A senior finance ministry official said in New Delhi that NTPC's DRHP is likely to be cleared through fast track route to allow the FPO to hit the market by first week of February. A fast-track issue does not require SEBI approval and can go to public immediately after filing the prospectus.

This will be the first public issue that would use the auction route for sale of shares to FIIs, financial institutions and high net worth individuals to optimise the price. Retail investors would get shares at the floor price.

The government is looking to offload 5 per cent more of its stake in NTPC and expects to mobilise Rs8,200-11,000 crore through the stake sale.

In 2004, the Government had mopped up nearly Rs2,700 crore by selling a 5.24 per cent stake in NTPC. After the 5 per cent stake sale next month, the government holding in NTPC will come down to 84.5 percent from the current 89.5 per cent.

The centre is also looking to divest 5 per cent in REC, which will also issue fresh equity of 15 per cent. In NMDC, the country's largest iron ore producer, the centre wants to divest 8.38 per cent.

The last disinvestment transaction for the current fiscal is likely to be Satluj Jal Vidyut Nigam Ltd, which will come out with an initial public offering in the last week of March, the official said.