Mumbai, 27 August India plans to sell 4.75% of the government’s holding in state-run NTPC Ltd in a follow-on sale, the Financial Express reported today, sending the power utility’s shares up 2.6%.
The proposed sale was aimed at increasing the free float of NTPC’s shares in the market and help improve the company’s valuation, the paper said, citing a power ministry note.
The government owned 89.5% of NTPC at end-June, data on the Bombay Stock Exchange website showed.
“As a result of the low level of free float, the turnover in NTPC’s shares is quite low,” it quoted the power ministry as saying in the note to the finance ministry’s department of disinvestment.
It said the free float needed to be at least 12% to become a component of the 50-share NSE index, and 15% for inclusion in the Morgan Stanley Capital International Indices.
At 0435 GMT, shares in the company were up 1.8% at Rs166.75 in a Mumbai market that gained 1.6%. The shares as much as 2.6% in early deals.
A spokeswoman for the power ministry could not be immediately reached.