Utility major NTPC’s follow-on-public offer (FPO) was subscribed 0.80 times on the second day on Thursday with lukewarm response from retail investors and high net worth individuals. The National Stock Exchange (NSE) data showed the issue received bids for over 330 million shares out of the total issue size of 412.2 million. The maximum bids were at Rs 209 for 218.3 million shares
The non-QIB (qualified institutional buyer) segment, comprising HNIs, was subscribed 0.07 times and the retail portion just 0.03 times. The QIB portion was subscribed 1.57 times as bids for over 320 million shares were received till on Thursday.
For retail and HNIs, the floor price has been fixed at Rs 201, while QIBs can bid any price above this. The retail portion is 35 per cent. Brokers said getting this fully subscribed might not be easy for the company. The issue closes tomorrow.
“Currently, NTPC has about 82.5 million shareholders. If we assume that the average application size of a retail shareholder is Rs 45,000, we are talking of an application for 224 shares. Taking this as a base, 637,500 applicants are needed if the retail portion is to be subscribed one time, which could be difficult. The retail portion of the issue could be mopped up by HNIs,” said Arun Kejriwal, director of Mumbai-based KRIS Research.
Investment banking sources said most bids came from public sector insurance companies and banks. Stock brokers catering to institutional investors said foreign institutional investors would bid on Friday and they expected the issue to sail through.
The stock closed at Rs 207.55 on the Bombay Stock Exchange, down 1.1 per cent.
I think RETAIL investors are more concerned about the current market situation, however retail investor should not worry about NTPC FPO, it is a good opportunity for mid- long term investors to buy the shares at this level of Rs 201.00. As great market analyst said that many power generating companies which are yet to start the generation and some have started generation are very small in compared to NTPC, still there share price is very high. One should understand the potential of NTPC and the great expansion plans of it. In my view it is the most stable and steady growth stock. So retailers should not wait, they should apply for NTPC FPO and get it. (it is once in a lifetime opportunity)
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