New Delhi: India’s government will raise at least Rs.11,360 crore selling shares in electricity generator NTPC Ltd making it the nation’s biggest offering since March.
The government will offer 783.3 million shares, or 9.5% stake, to investors on Thursday at a minimum price of Rs.145 apiece, the New Delhi-based company said in a stock exchange filing on Wednesday. That’s a 4.5% discount to the utility’s closing share price on Wednesday.
Prime Minister Manmohan Singh plans to raise Rs.30,000 crore this fiscal year through asset sales to narrow the budget deficit and avoid a downgrade of the nation’s debt. The government has raised almost one-third of that target, after raising Rs.3,140 crore from selling shares in the second-biggest explorer Oil India Ltd last week.
NTPC shares fell 2.4% to Rs.151.80 in Mumbai on Wednesday, the biggest decline since 23 November. The stock has fallen 3% this year, compared with a 1.1% gain in the benchmark Sensitive Index.
A decision to cancel permits for three coal blocks allotted to NTPC was reversed because of the impending disinvestment in the company, the coal ministry said last month. The three mines, located in Jharkhand, together hold about 650 million tonnes of coal. NTPC, which plans to add 14,500 megawatts (MW) in the five years ending 31 March 2017, may enhance the planned addition by 8,500 MW should the company get adequate coal supplies. NTPC has a capacity of 39,674 MW, the country’s biggest.
The company, which buys all of its coal, plans to develop mines in the country to produce 37 million tonnes of the fuel annually by the year ending 31 March 2017, Chairman Arup Roy Choudhury said on 7 August.
India will sell shares in four other state-run companies by 31 March disinvestment secretary Ravi Mathur said on Tuesday. Stake in Steel Authority of India Ltd and National Aluminium Co. Ltd may be offered as the government seeks to cut the budget deficit to 5.3% of gross domestic product this financial year from 5.8% last year. The government raised train fares and diesel prices last month to help reduce the shortfall.
The government raised Rs.5,830 crore selling a 10% stake in NMDC Ltd, India’s largest iron ore producer, in the third-biggest share sale in India in 2012, according to data compiled by Bloomberg. BLOOMBERG
Rakteem Katakey contributed to this story.