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NTPC issue subscribed fully; retail response tepid

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Our Bureau

Mumbai, Feb. 5

After an uncertain three days of the NTPC's follow-on public offering (FPO), the issue was subscribed 1.2 times on its last day on Friday, according to NSE data.

It received bids for 49.36 crore shares against the 41.2 crore shares on offer.

However, retail investor response was tepid to the end, with retail and HNIs subscribing to only 1.3 crore shares against the 20.4 crore shares reserved for them (going by BSE data). Separately too, the HNI portion was not fully subscribed.

Market-men said retail investors did not see much opportunity in the FPO as the floor price of Rs 201 was not much higher than the current market price.

The duration of the issue saw the scrip run up from Rs 205 to a high of Rs 211.65 and fall 3.4 per cent since then.

The portion allocated for Qualified Institutional Buyers (QIB) saw a lot of interest on the first day of the issue, but since then this portion too showed little enthusiasm. “On the first day there was a lot of arbitrage opportunity for QIBs,” said Mr Ashu Madan, President-Equity Broking at Religare Securities.

It was reported that LIC and SBI both subscribed to shares worth Rs 4,000 crore on the first day. SBI applied for shares worth Rs 1,000 crore in the FPO at Rs 202, Rs 204 and Rs 206, said sources.

QIBs seemed to have withdrawn their bids at Rs 209, as the bids at this level reduced by 1.02 crore shares to 20.56 crore shares on Friday. At Rs 211, 0.5 lakh shares were bid for, while at Rs 202, 16.93 crore shares were bid for.

At the floor price of Rs 201, 5.18 crore shares were bid for.

Related Stories:
NTPC follow-on issue fails to attract retail interest
NTPC FPO gets maximum bids at Rs 209
NTPC follow-on offer opens today; floor price at Rs 201

(This article was published in the Business Line print edition dated February 6, 2010)
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