NTPC plans follow-on public issue

NTPC, the country's largest power generator, is planning a follow-on public offer to raise funds for expansion.

A proposal for such an offer is with the parent ministry of the government-owned company. "We are reviewing the proposal (for the offer). A decision will be taken soon," Anil Razdan, power secretary, said on the sidelines of a foundation-stone laying ceremony at NTPC's 1,000MW Dadri plant in Uttar Pradesh.

NTPC, which currently has a generating capacity of 28,000MW, requires funds to reach its 2012 target of becoming a 50,000MW company. The thumb rule is that every megawatt (MW) of capacity addition requires an investment of Rs 4 crore.

NTPC, which first tapped the market in 2004, is expected to get a positive response from investors. "It has a good public image. It is the most trusted company in the power sector," Razdan said.

He did not specify whether NTPC would come out with a rights issue or yet another equity issue diluting the government's stake.

The NTPC stock was trading at Rs 150.45 on the Bombay Stock Exchange at 1300 hrs, down 1.99% from Thursday's close.