- Institutional buyers subscribe to 596.2 million shares
- Modi's government still short of FY16 stake-sale target
Institutional investors bid for almost double the shares offered in India’s top power producer NTPC Ltd., generating at least 40.2 billion rupees ($586 million).
Investors subscribed to 596.2 million shares, compared to 329.8 million offered at a floor price of 122 rupees apiece, according to stock exchange data. The one-day institutional portion comprised 80 percent of the total number of shares on sale. The balance is reserved for retail buyers and will go on sale Wednesday.
The government, which owns almost 75 percent of the company, plans to sell a 5 percent stake, or about 412.27 million shares, in the two-day sale, according to filings.
India still remains well short of its 695 billion-rupee stake sale target for the year to March 31. This fiscal, the government has sold shares in companies including Power Finance Corp. and Rural Electrification Corp. It has raised 133.4 billion rupees, or a fifth of the aim. Missing the target will put pressure on the country’s finances at a time when Prime Minister Narendra Modi is seeking to increase capital spending and boost growth.
The first day’s response indicates investor enthusiasm for New Delhi-based NTPC, which works in a regulated market and on an assured-return model.