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FPO buzz electrifies NTPC

Monday, September 3, 2007

NTPC was up 7.67% to Rs 186.60 at 15.18 IST on reports the government plans to divest 4.75% of its stake in the firm through a follow-on public offer that could bring in around Rs 6000 crore.


The BSE Sensex was up 99.88 points, or 0.65%, to 15418.48, as fears of a US economic slowdown eased after US President George W. Bush and Federal Reserve Chairman Ben Bernanke reassured investors on Friday (31 August 2007) they would do what was needed to shelter the world's largest economy from recent market turmoil.
Data released during trading hours on Friday (31 August 2007) showing strong economic growth in India in Q1 June 2007 and easing of inflation also aided upmove on the bourses.
On BSE, 22.64 lakh shares of the scrip were traded. The stock had an average daily volume of 10.28 lakh shares on BSE in past one quarter.
The scrip had touched a high of Rs 187.90 which is a record high for the counter. The stock hit a low of Rs 173 so far during the day. The stock had hit a 52-week low of Rs 117.90 on 8 September 2006.
The scrip had outperformed the market in the one month to 31 August 2007, adding 6.78% as against the Sensex's 2.22% gain. It had also outperformed the market in the past three months, gaining 9.44% against the Sensex's 5.13% rise.
India's largest power generator by revenue has an equity capital of Rs 8245.46 crore. Face value per share is Rs 10.
At the current price of Rs 186.60, the scrip trades at a PE multiple of 16.22, based on Q1 June 2007 annualised EPS of Rs 11.50.
In February 2004, the government allowed NTPC to go for an IPO of 10% of its paid-up capital in one or more stages to augment resources. NTPC chose to go for an IPO of 5.25%, leaving balance 4.75% of approved IPO for later date. The IPO of 5.25% was tagged with government divesting an equal shareholding. Subsequent to the offer, government shareholding in NTPC fell to 89.5% from 100%.
The IPO in 2004 was priced at Rs 62 to raise about Rs 5,400 crore. Based on the ruling market price, the government could get about Rs 6,531 crore with the new offer of around 35 crore shares.
The proposed sale is aimed at increasing the free float of NTPC's shares in the market and help improve the company's valuation, reports suggest
End June 2007, the government owned 89.5% of NTPC. Reportedly, the free float needs 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.
NTPC’s net profit jumped 52.6% to Rs 2369.90 crore on a 19.6% rise in sales to Rs 8969.70 crore in Q1 June 2007 over Q1 June 2006.
NTPC’s core business is operation of power generating plants. It also provides consultancy in the area of power generation to companies in India and abroad

Posted by pp at 4:27 PM  

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