Govt begins exercise to offload 9.5% equity in NTPC
New Delhi: The government on Tuesday initiated the process of disinvestment in NTPC by inviting bids from merchant bankers for 9.5 percent stake sale in the power major, which may fetch the exchequer over Rs 12,000 crore.
"Proposals are invited from reputed merchant bankers with experience and expertise in public offerings or OFS in capital markets to act as merchant bankers and to advise the government in the process," the Department of Disinvestment (DoD) said in a public notice.
The merchant bankers are required to submit their application by December 14.
Last week the Cabinet had approved sale of 9.5 percent stake in the country's largest power producer NTPC through the offer for sale route (OFS) through stock exchanges that could fetch over Rs 12,000 crore.
The government currently holds 84.50 percent stake in NTPC and post disinvestment Government's holding would come down to 75 percent.
The paid up equity capital of the company, as on March 31, 2012, is Rs 8,245.46 crore.
Shares of NTPC were trading at Rs 158.55, down 0.41 percent on the BSE. At the current market price, NTPC disinvestment could fetch around Rs 12,400 crore to the exchequer.
The disinvestment would also help NTPC to comply with the minimum public shareholding norms.
NTPC became a listed company in 2004. Thereafter in 2009, government further diluted its stake in the power producer.
The government has set a target of mopping up Rs 30,000 crore through disinvestment in the current fiscal. It has already raised over Rs 800 crore through stake sale in Hindustan Copper (HCL).
In the first stake sale of the current fiscal, the government sold 5.58 per cent stake in HCL for about Rs 808 crore at an average price of Rs 156.56 apiece, with bulk of the bids coming from LIC and PSU banks.
The government has already initiated the process of disinvestment of 10 percent of its stake in NMDC and 9.3 percent in MMTC. Besides, the Cabinet has also okayed disinvestment of 12.1 percent in Nalco.