New Delhi: The government will begin sale of a 5% stake in NTPC Ltd, India’s biggest power producer, on 3 February as part of plans to raise funds for spending on roads and ports.
The government, which currently owns 89.5% of the company, will sell 412.3 million shares in the public offer, which closes on 5 February, according to a statement from NTPC’s external public relations firm Concept PR. As many as 4.3 million shares will be reserved for NTPC employees.
Prime Minister Manmohan Singh’s government is accelerating asset sales after it won a second term in May without support from his former communist allies, who foiled previous disinvestment attempts. India plans to raise as much as Rs15,000 crore by selling shares in three state-run electricity companies.
A 5% stake in New Delhi-based NTPC is valued at about Rs9,500 crore, based on the current price.
JPMorgan India Pvt. Ltd, Citigroup Global Markets India Pvt. Ltd, Kotak Mahindra Capital Co. Ltd and ICICI Securities Ltd are managing the sale, according to sale documents filed by NTPC with the Securities and Exchange Board of India on 12 January.
The government also expects to raise as much as Rs6,000 crore from the sale of shares in Rural Electrification Corp. Ltd, power ministry secretary H.S. Brahma had said on 3 December. The government also plans to raise about Rs3,000 crore by selling a portion of Satluj Jal Vidyut Nigam Ltd, a hydroelectric producer in Himachal Pradesh.
As of 30 September, the company’s total installed power generation capacity was 30,644MW, including 28,350MW of generation capacity through 112 units owned by NTPC and about 2,294MW of capacity through two joint venture firms.