Govt. of India NTPC 5% Stake

The Government of India is selling a five percent stake in the National Thermal Power Corporation (NTPC), a state-owned public utility, and the largest power utility in India, for $1.03 billion.

The Government of India will sell a total of 412,273,220 shares, representing a five percent stake, at a floor price of ₹168 (~$2.52) per share, through a separate designated window of the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSEI). The shares of NTPC have been trading at ₹173.55 per share. The offered floor price is over 2 percent less than the current trading price of NTPC shares.

The Government of India has also included a provision for oversubscription, under which it can sell an additional 412,273,220 shares, representing an additional five percent stake, at a price of ₹168 (~$2.52) per share.

If the oversubscription option is used, the Government will end up selling a 10 percent stake in NTPC. The NTPC is also involved in developing thermal, solar, hydropower and wind energy projects. By selling a stake in the organization, investors have can to participate in India’s renewable energy market, especially solar. NTPC is the third largest solar project installer in the country.

The NTPC is also raising an additional ₹150 billion (~$2.3 billion) through the issuance of bonds and debentures on a private placement basis. In its annual report, the NTPC stated, “Funds raised through the issuance of bonds and debentures will be utilized for capital expenditures, working capital, and general corporate purposes.”

The NTPC is the top player in the Ministry of New and Renewable Energy (MNRE)’s central public sector unit (CPSU) solar program and procures solar power via reverse auctions conducted in all parts of the country.

According to Mercom’s India Solar Project Tracker, the NTPC has installed 870 MW of solar projects in India, to date.

Image credit: NTPC