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NTPC IPO fully bid within 15 minutes
By siliconindia staff writer
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Thursday, 07 October 2004, 19:30 IST
MUMBAI: Investors snapped up an initial public offering (IPO) from India's top power producer, state-run National Thermal Power Corp Ltd (NTPC), in the first 15 minutes of the offer's opening day, bankers said on Thursday.
NTPC will use the money from India's second $1-billion IPO in as many months to fund an aggressive expansion to feed the growing demands of India's energy-starved economy.
The issue follows Wednesday's market debut of Japanese electricity wholesaler J-Power, which rose as much as 6.5 per cent on its first day in the world's second-biggest IPO this year, raising $3.4 billion.
The 865.83-million-share NTPC offer -- a combination of new shares and a sale by the Government -- will raise Rs 53.86 billion ($1.17 billion) at the top a price band of Rs 52 to Rs 62 per share, making it the second-largest IPO in Indian market history.
In August, India's top software services exporter -- Tata Consultancy Services Ltd -- concluded the nation's biggest IPO, which raised Rs 54.2 billion.
NTPC will be valued at as much as Rs 511 billion ($11.1 billion). The issue closes on October 14.
"Valuations seem stretched for a utility company," said analyst with domestic brokerage Prabhudas Lilladher, Pramod Amthe. But he added that the issue was a long-term buy due to NTPC's cash in hand of Rs 22 per share and the huge growth opportunity for India's power sector.