NTPC files for IPO, to offload 5.25%

432.9 mn shares with face value of Rs10 on offer through the book-built route.

The National Thermal Power Corporation (NTPC) has filed its draft Red Herring prospectus with the Securities and Exchange Board of India for an initial public offering.

The corporation is planning to come out with a float of 432.9 million shares, amounting to a 5.25 per cent stake. The shares will have a face value of Rs 10 each and will be offered through the book-built route. The book running lead managers to the issue are ICICI Securities, Enam Financial Consultants and Kotak Mahindra Capital Company. Around 41.3 million equity shares are being offered to the public, while the balance 20.6 million shares are being offered to employees. Post issue, the government's stake in NTPC will come down to around 94.75 per cent.

The corporation will earmark 50 per cent of the issue for qualified institutional investors, 25 per cent for high net worth individuals and 25 per cent for retail investors.

NTPC is the first IPO by a power company after the enactment of the Electricity Act, 2003, and comes even as Tata Power Company is planning to raise $500 million through a mix of international offerings. Reliance Energy has raised around Rs 2,300 crore through a mix of instruments.

NTPC has an installed generation capacity of 22,249 Mw, representing about 19.1 per cent of India's total generation capacity.

The company has 13 coal-based plants with a total capacity of 17,480 mw, seven gas-based plants aggregating to 3,955 mw and three joint venture projects, which have a capacity of 314 mw.

NTPC posted a net profit of Rs 5,260 crore in 2003-04 (representing a 45.8 per cent jump over the previous year) on gross revenues of Rs 25,964.20 crore.

The corporation is planning to use the issue proceeds to fund its capital expenditure programme of Rs 41,522 crore in the next three years.The corporation is planning to add 9,370 mw of generating capacity.