NTPC files draft prospectus for IPO

This is the first public offering by a PSU under the UPA government. This will also be one of the largest IPOs, perhaps the second biggest after TCS, which is expected to mop up over Rs 5,500 crore within a few weeks. The NTPC issue has come one month after the new government took over. NTPC would issue 432.915 million shares of Rs 10 each comprising 5.25 pc of the existing equity base. The issue would be the largest IPO by an unlisted public sector company so far.

Of the proposed 5.25 pc equity, 0.25 pc, comprising 20.615 million shares, would be offered to the NTPC employees, the company said. It is expected to get a premium of not less than Rs 100 per share. With the IPO, the government8217;s stake in the company would come down to 95 pc of the enhanced equity base.

NTPC has mandated three merchant bankers, including Kotak Mahindra and ICICI Securities, to act as lead managers for its IPO. Enam Financials has been appointed as the third joint lead manager-cum-book runner for the ensuing issue of shares.

NTPC has an equity base of Rs 8,000 crore and 5 per cent of the equity, to be issued in the market, that comprise the total face value of Rs 400 crore. The issue would be priced at a premium to account for the substantial reserves the corporation has built up over the years.

The company had obtained government8217;s approval for 10 pc public float in one or more phases earlier this year. It had sought Sebi8217;s approval for a waiver of the listing norms. With this IPO, the government has now managed to list all its blue chip shares on the stock exchanges.