Cabinet nod to be sought for NTPC flotation

The Union power ministry is set to seek the Cabinet approval for the National Thermal Power Corporation's (NTPC) Rs 400 crore initial public offering, slated to hit the market in February.

NTPC chairman and managing director C P Jain today said the face value of the issue would be Rs 400 crore, while the premium was still being finalised.

"The power ministry has already floated a Cabinet note. We have set a target of February next for tapping the capital market," Jain said here at the sidelines of a conference on thermal power generation.

He said NTPC proposes to offload as much as 5 per cent of its equity to investors under the issue. The government currently holds 100 per cent equity in the company.

NTPC is expected to approach the Securities and Exchange Board of India (Sebi) seeking a waiver of the existing listing norms which stipulate a minimum float of 10 per cent for fresh listings.

"We have already written to Sebi on the waiver and would take it up afresh once the Cabinet approval is in place," Jain added.

NTPC is also planning to offer differential dividends for government and for other investors, whereby the latter would be eligible for special treatment in the form of higher dividend in lieu of lower voting rights.

In a bid to diversify its portfolio, the company is also planning to foray into new operational areas, including coal mining and coal washeries through the joint venture route, where it would hold a minority stake.

The move to diversify into the coal sector is part of the company's strategy to enter new business areas.

The company has floated three subsidiaries for power distribution, hydro power and power trading.