NTPC's public offer barely meets subscription target

Mumbai: The follow-on public offer of state-run power utility NTPC barely scraped through with the total subscription just 20 percent higher than the 412 million shares that were on the block, according to data available with the stock exchanges.

Auctions were held for a total of 495,614,840 shares, offered at a floor price of 201 per share, and the highest bid of 211 was made for just 50,000 shares and the bulk of it was at 209 for 205.6 million shares.

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The issue, which failed to excite individual investors, was primarily bailed out by the public sector institutions such as the State Bank of India and Life Insurance Corp. The bids by qualified institutional buyers were for twice the shares reserved for them.

On the other hand, retail individual investors bid for just 16.46 percent of the total shares reserved under this category, and even NTPC employees did not bid for the whole lot set aside for them -- the bids for this segment was for 43.85 percent.

The poor response to the issue has also put the government in a quandary over its future divestment plan. Top officials in the finance ministry had met Thursday to discuss a way out, as two more state-run companies are to hit the capital markets this fiscal.

The upcoming issues are from Rural Electrification Corp and NMDC, formerly the National Mineral Development Corp, slated to open Feb 19 and March 10, respectively.
Source: IANS