Govt throws away 9.5% of NTPC, gets huge foreign investor response
9 Feb 2013 5:16 AM IST
The blockbuster NTPC stake sale on Thursday fetched government Rs 11,500 crore, the second PSU share sale in a week that was over-subscribed, and helped it move closer to the Rs 30,000-crore disinvestment target.
The share sale of the country's largest power producer NTPC was over-subscribed 1.7 times as an offer price lower than the scrip's trading rate on stock exchanges received tremendous interest from foreign investors.
Coming within a week of the share sale of Oil India, the NTPC issue also was also lapped up by foreign investors in a big way, making the government say there is still a huge demand for PSU shares in the market. The total demand received for the offer was 132.84 crore shares, which is 1.7 times over the 78.32 crore shares or 9.5 per cent stake on the block.
The government had fixed the floor price or the minimum offer price at Rs 145 apiece. The indicative price, which is the weighted average price of all valid bids, came in at Rs 145.91 at the close of auction.
'The government is satisfied with the response to the NTPC offer. We expect more than Rs 11,500 crore from the issue,' Disinvestment Secretary Ravi Mathur said.
The total proceeds realised from disinvestment would be over Rs 21,500 crore so far this fiscal with the success of NTPC issue, helping government inch towards the Rs 30,000 crore budgeted target. Receipts from the stake sale would also help government restrict its fiscal deficit at 5.3 per cent of GDP in the ongoing fiscal.
'As far as FII participation is concerned there was good response. There is an appetite in market for PSU offerings in the market,'[ Mathur said. Shares of NTPC closed at Rs 148.15, down 2.72 per cent over its previous close on the BSE. During trade, NTPC scrip fell to a low of Rs 147.65, but still was higher than the floor price of Rs 145. Bids for over 63.50 crore shares were with 100 per cent margin, meaning if the bidder decides to withdraw later they can do so. Bids that came in with zero per cent margin were over 69.34 crore shares, according to the NSE data.
'One FII bid for Rs 1,000 crore (worth of) 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,' Mathur said. The fovernment holds 84.50 per cent stake in NTPC. After stake sale, its holding will come down to 75 per cent.
Citigroup, Morgan Stanley, Goldman Sachs, Deutsche Equities, Kotak Securities and SBI Cap Securities are acting as the merchant bankers for the stake sale.
SELL-OUT NOT ENOUGH, HINTS US PRIVATE RATING AGENCY S&P
US-based private rating agency Standard & Poor’s (S&P) said on Thursday that its rating on NTPC is not affected by the ongoing stake dilution by the government. S&P’s retained its BBB- rating on NTPC (at par with sovereign rating of the country).
‘We expect the government to remain NTPC’s majority shareholder and the power ministry to retain administrative control over the board. Therefore, at this stage, we believe that the reduction in the government shareholding in NTPC to 75 per cent from 84.5 per cent will not change our assessment of the company’s very strong link with the government,’ S&P said in a note issued from Singapore.
‘Our view is based on our criteria for assessing government-related entities. In addition, we don’t expect any change in the company’s very important public policy role as the country’s largest power utility,’ it added.
The government is selling 78.32 crore shares or 9.5 per cent stake in the company. So far, this fiscal the government has already raised over Rs 10,000 crore through stake sale in PSUs like Oil India, NMDC and HCL.
The share sale of the country's largest power producer NTPC was over-subscribed 1.7 times as an offer price lower than the scrip's trading rate on stock exchanges received tremendous interest from foreign investors.
Coming within a week of the share sale of Oil India, the NTPC issue also was also lapped up by foreign investors in a big way, making the government say there is still a huge demand for PSU shares in the market. The total demand received for the offer was 132.84 crore shares, which is 1.7 times over the 78.32 crore shares or 9.5 per cent stake on the block.
The government had fixed the floor price or the minimum offer price at Rs 145 apiece. The indicative price, which is the weighted average price of all valid bids, came in at Rs 145.91 at the close of auction.
'The government is satisfied with the response to the NTPC offer. We expect more than Rs 11,500 crore from the issue,' Disinvestment Secretary Ravi Mathur said.
The total proceeds realised from disinvestment would be over Rs 21,500 crore so far this fiscal with the success of NTPC issue, helping government inch towards the Rs 30,000 crore budgeted target. Receipts from the stake sale would also help government restrict its fiscal deficit at 5.3 per cent of GDP in the ongoing fiscal.
'As far as FII participation is concerned there was good response. There is an appetite in market for PSU offerings in the market,'[ Mathur said. Shares of NTPC closed at Rs 148.15, down 2.72 per cent over its previous close on the BSE. During trade, NTPC scrip fell to a low of Rs 147.65, but still was higher than the floor price of Rs 145. Bids for over 63.50 crore shares were with 100 per cent margin, meaning if the bidder decides to withdraw later they can do so. Bids that came in with zero per cent margin were over 69.34 crore shares, according to the NSE data.
'One FII bid for Rs 1,000 crore (worth of) 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,' Mathur said. The fovernment holds 84.50 per cent stake in NTPC. After stake sale, its holding will come down to 75 per cent.
Citigroup, Morgan Stanley, Goldman Sachs, Deutsche Equities, Kotak Securities and SBI Cap Securities are acting as the merchant bankers for the stake sale.
SELL-OUT NOT ENOUGH, HINTS US PRIVATE RATING AGENCY S&P
US-based private rating agency Standard & Poor’s (S&P) said on Thursday that its rating on NTPC is not affected by the ongoing stake dilution by the government. S&P’s retained its BBB- rating on NTPC (at par with sovereign rating of the country).
‘We expect the government to remain NTPC’s majority shareholder and the power ministry to retain administrative control over the board. Therefore, at this stage, we believe that the reduction in the government shareholding in NTPC to 75 per cent from 84.5 per cent will not change our assessment of the company’s very strong link with the government,’ S&P said in a note issued from Singapore.
‘Our view is based on our criteria for assessing government-related entities. In addition, we don’t expect any change in the company’s very important public policy role as the country’s largest power utility,’ it added.
The government is selling 78.32 crore shares or 9.5 per cent stake in the company. So far, this fiscal the government has already raised over Rs 10,000 crore through stake sale in PSUs like Oil India, NMDC and HCL.
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