NTPC’s mega share sale was over-subscribed on Thursday with the government receiving bids for 1,328.46 million shares against 783.26 million shares on sale helping the government fetch close to Rs. 11,500 crore — the biggest disinvestment proceed this fiscal.
“The government is satisfied with the response to this (NTPC) offer. We expect more than Rs. 11,500 crore from the issue,” said Ravi Mathur, disinvestment secretary after the offer closed for subscription.
The government had fixed the floor price for the 9.5% stake auction of NTPC at Rs. 145 per scrip. The government is selling 78.32 crore shares or 9.5% of its stake in NTPC through the offer for sale route. It holds 84.50% stake in NTPC and after stake sale, its holding will come down to 75%.
Share sale witnessed good participation from foreign institutional investors (FIIs).
“One FII bid for Rs. 1,000 crore shares in the early hours of the trade. More order inflow came in towards the end of the day. Individually, FIIs have put in $50-100 million,” said Mathur.
NTPC offer follows Rs. 3,100 crore share sale in state explorer Oil India last week.
So far this fiscal the government has already raised over Rs. 10,000 crore through stake sale in PSUs including Oil India, NMDC and HCL.
Selling shares in state companies is a key element of the government’s plan to bring down its fiscal deficit to 5.3 % of gross domestic product by the end of March, from 5.8% in 2011-12, to avoid a credit downgrade from global ratings agencies.
The government aims to raise Rs. 30,000 crore from sell-offs this fiscal and so far this fiscal it has already raised over Rs. 10,000 crore through stake sale in PSUs like Oil India and NMDC.
Citigroup, Morgan Stanley, Goldman Sachs, Deutsche Equities, Kotak Securities and SBI Cap Securities are acting as the merchant bankers for the stake sale.
Shares of NTPC closed at Rs. 148 down 3% on the Bombay Stock Exchange (BSE) on Thursday.