NTPC IPO : Govt to divest via IPO route

The government of India plans to divest 4.75 per cent of its stake in NTPC Ltd, the country’s biggest power generation utility, through an IPO that could fetch it nearly Rs 6,000 crores.

NTPC had a few years back proposed an initial public offering (IPO) of 24 per cent. But in February 2004, the government allowed NTPC to go for an IPO of 10 per cent of its paid-up capital in one or more stages to augment resources.

The company chose to go for an IPO of 5.25 per cent, leaving balance 4.75 per cent of approved IPO for later date. The IPO of 5.25 per cent was tagged with government divesting an equal shareholding. Subsequent to the offer, government shareholding in NTPC fell to 89.5 per cent from 100 per cent.

While the IPO in 2004 was priced at Rs 62 to raise about Rs 5,400 crore, the company’s current share price is at Rs 166. Based on this price, the government could get about Rs 6,000 crore with the new offer of around 35 crore shares.

Share price of NTPC closed at Rs 173.35 on NSE Rs 6.95 up from the previous close of Rs166.40 based on the above news.

For further updates on NTPC IPO do check this blog regularly.