NTPC Followon Issue

The NTPC follow on issue seems to have failed its objective, as hardly anyone other than the PSU FIs have subscribed in large numbers, that too i suspect due to heavy pressure from the babus and netas. Worse the market crash of today, has not helped one bit.

Check out the Stats here.

Sr.No. Category No.of shares offered/reserved No. of shares bid for No. of times of total meant for the category
1 Qualified Institutional Buyers (QIBs) 204000000 320533444 1.5712
1(a) Foreign Institutional Investors (FIIs) 9000936
1(b) Domestic Financial Institutions(Banks/ Financial Institutions(FIs)/ Insurance Companies) 311532508
1(c) Mutual Funds 0
1(d) Others 0
2 Non Institutional Investors 61200000 4693640 0.0767
2(a) Corporates 4487560
2(b) Individuals (Other than RIIs) 174356
2(c) Others 31724
3 Retail Individual Investors (RIIs) 142800000 4766776 0.0334
3(a) Cut Off 0
3(b) Price Bids 4766776
4 Employee Reservation 4273220 424704 0.0994
4(a) Cut Off 0
4(b) Price Bids 424704

Updated as on 04 Feb 2010 at 1700 hrs

This should be a big jolt to the cash strapped govt which has ramped up the fiscal defecit over the years and a huge question mark for the govt desperate to control its fiscal deficit via the disinvestment process.

I was expecting at least a good qib and fii subscription but this was not to be. When the stock falls from 242 to Rs 211 to 204 in a little more than a month , it was foolish of the govt not to give at least a 5 to 10 % discount to public . Even the staff subscription (at a  discount of Rs10)  has been abysmally low. Worse all bids are price bids and no one wants to risk bidding at cutoff. Hope this is an awakening to a greedy govt that expects people to subscribe to its IPOS with their eyes shut that to at petty discounts , while it openly milks them of due profits.


4 thoughts on “NTPC Followon Issue

  1. fpo being undersubscribed means only 1 thing…
    people don’t believe in the long term prospects of the company and think that the stock is overpriced….

    the govt cannot offload the shares at a hige discount because if it does that… the existing stock holders will loose considerable value and will start dumping the stock

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