The Hindu Business Line : NTPC offering may be delayed beyond August

THE Disinvestment Department will start consultation process next week for clubbing the offer for sale of 5.25 per cent of the Government's equity in National Thermal Power Corporation (NTPC) with the initial public offering (IPO) proposed by the corporation.

Consequently, as much as 10.5 per cent of the equity in NTPC at a face value of Rs 865 crore would be on offer that could fetch a total of over Rs 4,000 crore, according to Government sources associated with the process.

The Cabinet Committee on Economic Affairs (CCEA), which will now deal with disinvestment cases, had earlier this week cleared the sale of 5.25 per cent of the Government's stake in NTPC to honour an announcement made by the Finance Minister, Mr P. Chidambaram, in his Budget speech for 2004-05.

The clubbing of the IPO and the offer for sale may delay the primary offering beyond August. NTPC had earlier planned to hit the market in August with the IPO for expanding the equity base by 5.25 per cent after the proposed floatation by Tata Consultancy Services.

The company had filed a draft red herring prospectus with SEBI in this regard. However, sources said that the draft prospectus may now have to be revised to accommodate the decision taken by the CCEA to divest 5.25 per cent of the Government's stake in the Navratna company.

NTPC has already started pre-marketing surveys to address various issues coming from the investors with the help of Kotak Mahindra, ICICI Securities and Enam Financials who have been appointed as lead managers and book runners for the ensuing IPO.

The Department of Disinvestment may also consider retaining the same set of bankers and financial institutions for the sale of the Government's equity, the sources said.

The proceeds from the IPO will be utilised by NTPC to fund expansion of its generating capacity along with the renovation and modernisation of the existing plants whereas the money from the offer for sale would go to the Government's kitty.

More Stories on : IPOs | Power | Disinvestment

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page