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Friday, Feb 06, 2004

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NTPC public issue gets clearance

Our Bureau

New Delhi , Feb. 5

THE Cabinet has cleared a proposal for National Thermal Power Corporation (NTPC) to float an initial public offering (IPO) for up to 10 per cent of its equity. According to the Power Secretary, Mr R.V. Shahi, a 10 per cent float will raise around Rs 3,000 crore.

"NTPC should be ready for an IPO in the next 2-3 months," Mr Shahi told presspersons here. The IPO will mean infusion of additional equity into NTPC, which has a current equity base of Rs 8,000 crore.

NTPC will now work out the details of the IPO offer, its size and the market to be offered in. There are plans to float a domestic IPO for 5 per cent equity and equal amount in the overseas ADR market.

The new equity will enjoy the same dividend and voting rights as the existing equity. NTPC had initially mooted a proposal for lower voting rights and higher dividend payment to make the new equity, and hence, the IPO more attractive.

The additional equity will be used to fund NTPC's Tenth Plan projects.

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