The Hindu Business Line : NTPC IPO plans on track; SEBI approval received

THE planned public offer of shares by National Thermal Power Corporation (NTPC) is on track and is likely to hit the market by end-July or early-August.

However, against the earlier planned 10 per cent offering, the company will now offer only 5 per cent of its shares in the market. NTPC has a large equity base of Rs 7,812.50 crore.

Agency reports on Friday indicated that the company has received approval from market regulator, Securities and Exchange Board of India (SEBI), for a 5 per cent equity offering. As per SEBI rules, a minimum of 10 per cent equity offering is compulsory for a company to go public and list its shares.

However, in the case of NTPC, the regulator has made an exception mainly based on the argument that a 10 per cent issue size may be too large for the market to absorb. NTPC's current equity is divided into 7.81 crore shares of Rs 1,000 each. A 10 per cent offer would have meant an issue size of Rs 781 crore and that is not including the premium. The company's contention was that given the current sentiment in the market, there might not be a good appetite for a mega offering.

Earlier in February, when the NTPC public offer was cleared by the Cabinet, the Power Secretary, Mr R.V. Shahi, was quoted as saying that the company would sell 10 per cent of its equity and the offer size would be Rs 3,000 crore including the premium.

Even after the reduced size now, the offer will still be sizeable.

Meanwhile, the company appears to have already gone on the public issue mode with officials refusing to speak on record citing the impending public offer.

More Stories on : Regulatory Bodies & Rulings | IPOs | Power

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NTPC IPO plans on track; SEBI approval received