The government has managed to see through an offer for sale worth Rs 11,357 crore ($2.13 billion) of public sector power utility firm NTPC Ltd, in the biggest equity sale in the current financial year. The money will help the Indian government prune its fiscal deficit.

As per data collated by the stock exchanges, as of 3.30 PM which was also the closing time for the single day issue, the offer for sale issue was subscribed 1.7 times. The issue had a floor price of Rs 145 a share and an indicative price of Rs 145.91 a share.

NTPC last traded at Rs 148.15, down 2.7 per cent on BSE in a weak Mumbai market on Thursday.

The government had put on block 783.26 million shares representing 9.5 per cent stake of the company. The share sale, besides helping it raise resources, will also allow the government to bring down its holding in NTPC to sub 75 per cent level. As per new listing norms promoters need to maintain at least 25 per cent stake with public.

NTPC is the largest power generation firm in India and one of the top performing PSUs.

Although the government has sold shares in other PSUs this fiscal, NTPC share sale is the biggest since it sold shares of ONGC last March. The ONGC issue, which raised over Rs 12,000 crore, had received poor response and was bailed out by public sector insurer LIC.

Such share sales of public listed PSUs is one of the routes to raise cash as the government struggles to meet its fiscal deficit targets. Higher fiscal deficit has put a Damocles sword over the economy due to risk of a sovereign rating downgrade which can deepen the slowdown in the economy.

(Edited by Prem Udayabhanu)

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