Date:15/10/2004 URL: http://www.thehindubusinessline.com/2004/10/15/stories/2004101502780100.htm

Back NTPC issue subscribed 12 times

Our Bureau

Mumbai , Oct. 14

NATIONAL Thermal Power Corporation's initial public offer, the first high profile disinvestment since the UPA Government took charge in May, was oversubscribed by a dozen times by late evening on the closing date of the issue on Thursday.

According to data available on the Bombay Stock Exchange, by 8 p.m. on Thursday , investors had placed cumulative bids of 1,077.40 crore shares, or 12.44 times the 86.58 crore equity shares available for subscription.

The issue aims to raise around Rs 5,360 crore by selling 10.5 per cent equity in the country's largest power generation company. After the IPO, the Government's stake in the company would be reduced to 89.5 per cent.

"We expect the subscription to this issue to exceed that of others including ONGC and TCS. Besides, this issue has attracted quality investors. This is a good signal for future disinvestments," said Mr S. Mukherjee, Managing Director and CEO, ICICI Securities, lead managers to the issue.

Institutional investors had, till Thursday evening, subscribed for 16 times more than their allocated 50 per cent share. A range of new global investors, including hedge funds and insurance companies have been subscribing to the IPO, said a merchant banker. According to brokers, NTPC shares were commanding a premium of Rs 12-13 per share. NTPC had fixed a price range of Rs 52-62 for its IPO, which opened for subscription on October 7, and was sold out within 20 minutes.

"The quality of clients in this IPO appears far superior to some of the earlier ones. This demonstrates the overseas investors' keen interest in India, NTPC and also in the ongoing power sector reforms," said Mr Dharmesh Mehta, Head - Broking, Enam Securities.