NTPC initial offer opens on Oct 7

To offer 866.83 million shares, amounting to 10.5 per cent of the post-issue expanded capital

National Thermal Power Corporation (NTPC), which has fixed a price band of Rs 52-62 per share, on Tuesday said that its initial public offer (IPO) will open for subscription on October 7 and close on October 14.

It finalised its IPO details with the finalisation of the price band and filing of the draft Red Herring prospectus with the Registrar of Companies on Tuesday, an NTPC release said. The central power utility is kicking-off roadshows in Mumbai on Wednesday.

NTPC will offer 866.83 million shares, amounting to 10.5 per cent of the post-issue expanded capital, with a face value of Rs 10 each.

The issue comprises fresh issue of 432.91 million shares and an offer for sale of equivalent number of shares held by the government, which is part of the government's disinvestment plan. Post-issue, the government holding in the company will come down to 89.5 per cent of the expanded capital of the company.

The issue would also mark the first instance of disinvestment since the Congress-led United Progressive Alliance (UPA) assumed office in May this year. The government hopes to raise Rs 4,000 crore through sale of its shares in NTPC and its residual equity in Balco and Maruti Udyog Ltd.

At the upper level of the price band, the IPO is expected to raise Rs 5,369 crore, the second largest public offer after TCS, which garnered a record Rs 5,420 crore.

This puts NTPC's valuation at Rs 51,135 crore, making it the country's third most-valuable firm after ONGC and Reliance, edging out Indian Oil from the third spot in terms of market capitalisation.

ICICI Securities, Enam Financial Consultants and Kotak Mahindra Capital Company are the lead managers for the NTPC issue. The proceeds from the issue will be utilised to augment NTPC's long-term resources.

The company plans to nearly double its generation capacity to 40,000 mega watt by 2012. About 9,400 mw capacity is proposed to be added during the Tenth Plan and 11,558 mw is planned during the 11th Plan period.

Of the planned capacity addition, 2,000 mw has been commissioned while another 8,490 mw capacity is under implementation and 5,080 mw is under tendering process. The present installed capacity of the company is 21,749 mw.