Govt To Sell 5% Stake In NTPC

The Government of India is going to sell five per cent stake in India's largest power producer- National Thermal Power Corporation (NTPC) at a floor price of Rs 122 a piece to raise Rs 5,030 crore in the sixth public sector unit share sale this fiscal.

For a period of over two days, the sale would take place, with institutional bidders getting the first chance to buy shares on Wednesday. Twenty-four per cent shares have been reserved for retail investors who would also get to bid on Wednesday. NTPC will be the first company to hit the market under the revised Offer-For-Sale (OFS) guidelines of Securities and Exchange Board of India (SEBI). OFS would be spread over two days. The bidding would remain open from 9.15am to 3.30pm on both the days.

Speaking on the process, NTPC said:"Retail investors shall be allowed to place their bids only on the T+1 day. Further, those non-retail investors who have placed their bids on T day and have chosen to carry forward their bids to T+1 day, shall be allowed to revise their bids on T+1 day according to the SEBI OFS Circulars." T here stands for transaction.

Under the SEBI's modified OFS rules, the allocation shall be at or above the floor price on price priority basis. This will be charged at multiple clearing prices. However, allocation to retail investors, who have the option to bid at the cut off price, can be below the floor price on account of retail discount offered.