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NTPC FPO Price Band Fixed @ Rs 201 a Share |
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Written by Sara Khan
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Tuesday, 02 February 2010 |
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TUESDAY, February 2, (News Locale) - The benchmark price for the proposed follow-on price (FPO) for National Thermal Power Corporation (NTPC) has been fixed at Rs 201 a share by the Indian government. This NTPC FPO price band is a 5% discount on the closing price of Rs 211.25 on the Bombay Stock Exchange (BSE) on Monday.
The Union government holds 89.5 per cent stake in NTPC and has revealed plans to release 41.22 crore shares or 5 percent of the shares through its proposed FPO. Depending on the response to this FPO, the government can make a minimum of Rs 8,286 crore through this divestment initiative.
This price is low by the government's expectations. It had initially thought of recouping Rs 11,000 crore through NTPC alone, which means the FPO prince band should have been in the region of Rs 265-Rs 268 a share.
NTPC employees will be offered a discount of Rs 10 per share, which means they can buy shares at Rs 191 each, according to the decision by the Empowered Group of Ministers (EGoM). ICICI Securities, JP Morgan, Citi and Kotak are the investment bankers for this scheme. The proceeds from the FPO would be used to bank social sector schemes.
The government had initially divested 5.25% of fresh equity shares in NPTC in October 2004 when it had raised over Rs 5,000 crore from the scheme.
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