“The highlight of the issue has been the encouraging FII participation of 925.45 crore, which works out to more than 12.70% (of total),” – Neeraj K Gupta Disinvestment Secretary
New Delhi : Despite weak market sentiment, the government’s 5 per cent stake sale in India’s largest power producer NTPC got off to a blockbuster start on Tuesday with FIIs and institutional buyers alone putting in bids for as much as Rs 7,287 crore, against the total issue size of Rs 5,030 crore.
On the first day of the two-day offer for sale (OFS), institutional buyers, who were offered over 32.98 crore out of more than 41.22 crore shares, bid above the floor price of Rs 122 apiece.
Retail investors will get to bid for their quota of over 8.24 crore shares on the final day on Wednesday. The total bids that poured in aggregated to Rs 7,287 crore, with 59.62 crore shares, 1.8 times the offer size, being subscribed.
“There was encouraging response from all segments of institutional investors and FIIs. There are large number of insurance companies, including public and private, which have participated in the share sale,” Disinvestment Secretary Neeraj K Gupta said. According to sources, state insurance company LIC, which has rescued many stake sales, including the recent IOC disinvestment, this time around bid for shares aggregating to less than Rs 3,000 crore.
Of the total Rs 7,287 crore subscription that has come in, Rs 5,325 crore came in from insurance companies and Rs 925 crore from FIIs. Besides, Rs 498 crore was subscription amount from banks, Rs 436 crore from mutual funds and Rs 102 crore from HNIs and others.
Economic Affairs Secretary Shaktikanta Das tweeted: “Response to NTPC stake sale encouraging. Reinforcement of market confidence on Indian economy.” In the secondary market, the scrip closed lower at Rs 123.90, down 2.33%.
After the sale, the government will continue to hold a majority stake of 69.96 per cent in NTPC. Moody’s Investors Service, in a statement said, NTPC’s rating would remain unaffected post stake sale as it remains supported by its strategic importance to the Indian economy, given its position as India’s largest power generation company.
So far this fiscal, government has raised over Rs 13,300 crore through disinvestment in five PSUs – EIL, Indian Oil Corp, PFC, REC and Dredging Corporation. This is against a target of Rs 69,500 crore for 2015-16.
