NTPC share sale may fetch around Rs14,000 cr for govt

The government expects to raise around Rs7,000 crore ($1.1 billion) through sale of a 5-per cent stake in NTPC, which got off to a flying start with 86 per cent of shares reserved for institutional investors getting subscribed by the afternoon.

The government is selling over 412.2 million shares or 5 per cent stake in the state-run power producer with an option to retain over-subscription of similar amount, which could raise the money raised through NTPC stake sale to nearly Rs14,000 crore.

NTPC has set the floor price for the deal at Rs168.0 a share, which translates to around Rs7,000 crore inflow into the exchequer.

The two-day sale is being carried out through the bookbuilding route with 412.3 million secondary shares in the base deal and an over-subscription option of an equal amount of shares.

In today's offer for sale (OFS), the government is selling over 329.8 million shares to institutional buyers.

Institutional investors had placed bids for 284 million (28,47,75,011) shares, or 86 per cent of total size, by 1200 noon, NSE data showed.

The OFS issue will open for retail investors tomorrow.

However, in secondary market, shares of NTPC fell 3 per cent to Rs168.15 each on the BSE.

The government has so far raised over Rs8,800 crore through disinvestment in six companies in this fiscal, including selling a stake in L&T through Specified Undertaking of Unit Trust of India (SUUTI), and one share buyback.

The government has targeted to raise Rs72,500 crore through sale of stake in PSUs in the 2017-18 fiscal.

This includes Rs 46,500 crore from minority stake sale, Rs15,000 crore from strategic disinvestment and Rs11, 000 crore from the listing of PSU insurance companies.