On Tuesday, NTPC stated it has fixed the bottom price at Rs 201 per share for its follow-on-public offer, opening on Wednesday.
In a statement made to the BSE, the company said in the meeting conducted on 1st February, the group of ministers fixed the bottom price of FPO offer of NTPC at Rs 201 for a share.
89.5% of the stake in the company is held by government, of which it intends to divest 5% stake, comprising 41.22 crore (412.2 million) shares via the scheduled FPO. At the bottom price, the government stands to earn 8,286 crore (Rs 82.86 billion) from the market.
The ministers also approved a discount of Rs 10 per share to employees applying for shares in the shore, thus deciding the bottom price for the employees at Rs 191.
This is the first public issue following the French Auction method of raising funds. it means now the institutional buyers can bid over a particular floor price. The highest bidder receives preference when allotting the shares.
The proceeds of the FPO would be used for the Investment Fund that funds social sector schemes.
The government has chosen ICICI Securities, JP Morgan, Citi and Kotak as investment bankers to the issue.