Government’s 5 per cent stake sale in India's largest power producer NTPC got off to a thumping start on Tuesday with the institutional investors portion getting oversubscribed within two hours of opening of trade.
Of the over 32.98 crore shares on offer for institutional investors, bids for over 38.92 crore shares or 1.18 times the shares on offer have come in during the first two hours of trade. Bidding would open for retail investors, for whom 20 per cent shares are reserved, on Wednesday.
The Government is selling over 41.22 crore shares or 5 per cent stake in NTPC at a floor price of `122 a piece. If fully subscribed, the stake sale would fetch `5,030 crore to the exchequer. In the secondary market, the scrip was trading at `124.70, down 1.69 per cent over the previous close.
The share sale is the first under SEBI's revised offer for sale (OFS) rules that allow the bidding for shares spread over two days. The floor price of `122 a piece was at a 3.82 per cent discount to Monday’s closing price of `126.85 on BSE.
While the issue opened for institutional bidders on Tuesday, the retails investors, for whom 20 per cent shares have been reserved, will get to bid on Wednesday. NTPC is the first company to hit the markets under the revised OFS guidelines of market regulator Sebi.