Government To Divest Up To 10% Stake In NTPC On Tuesday
Government will sell up to 82.4 crore shares in NTPC.
The government will offload up to 10 percent stake in the country's largest electricity producer NTPC Ltd. with an aim to meet the steep divestment target set in the Union Budget 2017-18.
The Centre will sell up to 41.2 crore shares, or 5 percent stake via an offer for sale, with an option to sell another 5 percent in case of oversubscription (known as a greenshoe option), according to a stock exchange filing.
The floor price of the sale has been set at Rs 168 a piece at a discount to the current market price of Rs 173.3.
The share sale will be limited to institutions and high networth individuals on the first day, while retail investors will be allowed to bid on Wednesday. Retail investors will be given shares at a 5 percent discount to the cut-off price.
The company has picked Citigroup Global Markets India, Jefferies India, Axis Capital and Yes Securities to broker the sale.
Prime Minister Narendra Modi's administration has budgeted a 35 percent increase in proceeds from asset sales in the current financial year 2017-18, aiming to shrink India's fiscal deficit, which is the widest among its Asian peers. In the Budget announced on February 1, the Centre set an ambitious target of raising Rs 72,500 crore by divesting stake in government entities for FY18. It has so far raised over Rs 8,800 crore through disinvestment in six companies, including selling stake in Larsen & Toubro Ltd. through Specified Undertaking of Unit Trust of India (SUUTI), and one share buyback.
In August this year, the power generator reduced its capital expenditure target by 18 percent over last yea amid slowing electricity demand growth which is keeping power plants under-utilised, and delayed new investments in the power sector.
NTPC's stock has gained 5.3 percent in the current fiscal year, compared to the benchmark BSE Sensex which is up 7.2 percent in the same period.