The government successfully raked up Rs 5,030 crore from the sale of its 5% stake in state-owned NTPC Ltd , even as the retail participation evoked a lukewarm response amid a shaky stock market.
Institutional investors gave a thumping response to the NTPC issue including FIIs and HNIs. Keeping to its reputation, public sector insurance company—the LIC participated actively and made a big application bid of Rs 3000 crore for NTPC’s share. Even way back in August 2015, LIC had bought 90% of the IOC’s shares on offer. IOC’s stake sale had garnered a whopping Rs 9,370 crores.
According to Disinvestment Secretary Neeraj K Gupta, even the retail portion would have been over-subscribed had the broader markets been stable. About 63% of the shares sold were allocated to insurance companies, led by state-run LIC.
Retail investors, who were reserved 20 % of the issue size, got 8.5 % of the shares. FIIs were allocated 18 % or about one-fifth of the shares sold and mutual funds got 8.5 %. High Networth Individuals (HNIs) managed 2 % of the shares allocated.
The public issue was of 41.22 crore equity shares of NTPC through the two-day Offer for Sale (OFS) route at a floor price of Rs 122 apiece. SBI Cap Securities, ICICI Securities, Edelweiss Securities and Deutsche Equities were the investment bankers in the NTPC stake sale.
Retail investors bid for only about 3.63 crore shares out of 8.24 crore reserved for them. Yesterday, institutional investors had bid 1.8 times the offer size of 32.98 crore shares.
Retail investors were also given a 5 % discount to the floor price. “Cut off price with respect to non retail category of NTPC has been fixed at Rs 122.05,” stock exchange data said.
With NTPC sale, government’s disinvestment proceeds have inched up to over Rs 18,330 crore. It had earlier divested stake in five PSUs – EIL, Indian Oil Corp, PFC, REC and Dredging Corporation.