Financial Daily from THE HINDU group of publications
Saturday, Oct 16, 2004

Cross Currency

Group Sites

Industry & Economy - Power
Markets - IPOs

NTPC issue attracts 14 lakh retail investors

Our Bureau

According to an investment banker, retail investors are learning to trust markets again and are here to stay "provided no (other scam) burns their fingers again".

Mumbai , Oct. 15

RETAIL investors are back in hordes. The public offer for sale of 10.5 per cent equity in the Government-owned National Thermal Power Corporation has attracted more than a million retail investors - higher than any other public issue this year.

Over 1.41 million retail investors subscribed for the NTPC issue that closed yesterday, a clear indication that the great Indian middle class may be learning to trust the stock market again. Comparatively, ONGC issue attracted only 5.67 lakh retail investors, the TCS public issues saw more institutional investors and high networth individuals lining up for it.

The NTPC issue, which aims to raise around Rs 5,360 crore by selling equity in India's largest power generation company, saw its retail share 3.79 times oversubscribed.

"After the NTPC issue opened, our branches in many places in Gujarat were flooded with interested investors. This bodes well for future public issues. This turnout reminds us of the times before the 1990s stock market scams when retail investors had begun turning towards the stock markets in a big way," said Mr S. Mukherjee, Managing Director and CEO, ICICI Securities, lead managers to the issue.

According to another investment banker, retail investors are learning to trust markets again and are here to stay "provided no (other scam) burns their fingers again".

"This is also a signal that retail investors are waiting for reasonably good public issues. NTPC was a good issue for the public because it clearly has fewer risk factors, in that unlike an ONGC where returns are linked to oil price volatility and subsidy burden or TCS where a lot depends on outsourcing trends. NTPC is a culmination of growing investor interest," said a banker.

NTPC hopes to use the money raised from selling these shares for adding six new power generation projects that will increase its total generation capacity by 6,690 MW. The projects will be funded through a 70:30 debt to equity ratio, according to the offer document. The company currently produces 26.7 per cent of the total power generated in India. The company's total income for the year ended March 31, 2004 was Rs 25,964 crore. The company had recorded a net profit of Rs 5,260 crore.

More Stories on : Power | IPOs

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

Stories in this Section
`ADB priorities closely linked to Govt's plan'

Inflation declines on cheaper fuel products
NGO stresses need for district-level environ tribunals
Fishing in troubled waters
`Redouble efforts for step-up in Indo-Australian ties'
`Security vital for enhancing trade'
Awareness programme on anaesthesia by ISA
No hike in petro prices
Rofecoxib ban — Boom seen for other Cox II inhibitors
Does `drug' master files number tell a tale?
NTPC issue attracts 14 lakh retail investors
Deadline extended for uplinking news channels
Pac Soft develops e-learning software
SPJIMR ties up with Virginia Tech to offer IT Master's degree in Mumbai
Global to set up Rs 175-crore hospital in Kolkata
Over 50,000 enrol at The Hindu Opportunities Fair
Rising per-hire cost, attrition bugbear of BPO firms
Delhi to host global HR meet from Nov 22
Constru India meet to focus on airport development
In Hyderabad today
Metallic scrap imports: Pre-shipment inspection certificate made mandatory
Upasi concerned over sharp increase in tea imports
Exports in Sept up 17 pc
Raw sugar import options turn unviable

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2004, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line