Ntpc Ipo

TATrader · #11 8th October 2004, 08:03 AM

Ntpc Ipo oversubscribed in 15 minutes

Quote:

India's second-largest initial public offering, a $1 billion-plus issue by National Thermal Power Corp. Ltd. (NTPC), sold out in 15 minutes on Thursday as investors bet the company would profit from fast-growing demand.

The rush to buy shares in India's top power producer boosted the sector and lifted the rupee off an early low on a view that NTPC would help revive foreign investor interest in the country.

NTPC will use the money from India's second billion-dollar IPO in as many months to fund an aggressive expansion to satisfy growing electricity demand in Asia's fourth-biggest economy.

"The future of the power sector is bright in India," said Sanjay Sachdev, managing director of Principal Mutual Fund. "The strong demand, despite a stiff valuation, reflects the long-term positives of the offer," said Sachdev, whose fund bid for shares.

The offer of 865.83 million shares -- a combination of new shares and a sale by the government -- will raise 53.86 billion rupees ($1.17 billion) if it is priced at the top of a band of 52 to 62 rupees per share.

That makes it India's second-largest IPO ever, just behind the 54.2-billion-rupee flotation of top software services exporter Tata Consultancy Services Ltd. in August.

The government's holding in NTPC will drop to 89.5 percent after the IPO.

Stock exchange data showed the NTPC issue, which closes Oct. 14, had attracted bids for 2.7 times the shares on offer by late Thursday. About half the demand came in at 62 rupees per share.

SIZE IS A DRAW

The company would be valued at 511 billion rupees ($11.1 billion) at the top end of the band. That is three times the value of Japanese electricity wholesaler J-Power, whose shares started trading on Wednesday after a $3.4 billion IPO, the world's second biggest this year.

"Size is a big draw for the NTPC issue," said Abhay Aima, head of equities and private banking at HDFC Bank. "From a foreigner's point of view, it is the biggest stock available in the infrastructure sector, which is the key area of growth."

Bankers said the float's sheer size had generated huge demand from foreign fund managers. Half the offer is reserved for qualified institutional buyers.

The robust demand on Thursday raised expectations of a sector re-rating and fired a rally in power stocks.

Tata Power Company Ltd. jumped 4.8 percent, Neyveli Lignite Corporation Ltd. rallied 4.4 percent and Power Trading Corporation Ltd. added 1.3 percent.

The Indian rupee rebounded from a low of 45.91 per dollar to end at 45.85/86, partly buoyed by the NTPC bidding.

"Valuations seem stretched for a utility company," said Pramod Amthe, an analyst with domestic brokerage Prabhudas Lilladher, of NTPC.

But he added that the issue was a long-term buy due to NTPC's cash in hand of 22 rupees per share and the huge growth opportunity for India's power sector.

With an installed capacity of 112,058 megawatts by March 2004, India faced an energy shortage of 7.1 percent last year. The government plans to add 41,110 MW by March 2007.

NTPC, which accounts for 27 percent of India's power generation, plans to meet the growing demand by boosting its generating capacity by 9,370 MW, or 44 percent, by March 2007.

While NTPC has not created the sort of buzz that surrounded the long-awaited Tata Consultancy debut, traders said the market was hungry for quality Indian paper.

"It will be a welcome addition to market capitalisation from the country's largest power producer," said Sashi Krishnan, chief investment officer at Cholamandalam Asset Management.

NTPC faces competition from private utilities such as Reliance Energy Ltd. and Tata Power.

At the offered band, NTPC quotes at 10.6-12.7 times earnings for the year to March 2004. Reliance Energy was at a trailing price-to-earnings multiple of 30 while Tata Power traded at 14.

At the top of its price band, NTPC will be neck-and-neck with Tata Consultancy to be India's fourth-biggest listed company by value, just behind state-run Indian Oil Corp Ltd.

Anil · #12 16th October 2004, 09:23 PM

NTPC prices IPO at top end

Quote:

National Thermal Power Corp. Ltd. (NTPC), India's top power producer, has raised 53.68 billion rupees in the country's second-largest IPO after pricing the offering at the top end of an indicated range.

State-run NTPC, which needs the money to fund an aggressive expansion to satisfy growing demand for electricity in Asia's fourth-largest economy, received a strong response from investors to India's second billion dollar issue in as many months.

"The response was unprecedented," P. Narasimharamulu, director finance of NTPC told Reuters on Saturday over telephone from his home in New Delhi. "The listing is on Nov. 5."

The offering, which closed on Thursday, was oversubscribed about 11 times, with more than 1.47 million applications. Investors have gobbled up Indian IPOs this year, betting on robust growth in corporate profits in one of the world's fastest expanding economies.

Narasimharamulu said the issue was priced at 62 rupees a share late on Friday in consultation with the government, against an indicated range of 52-62 rupees. Reuters had reported on Friday that the IPO was expected to be priced at the top end.

A total of 865.83 million shares, or 10.5 percent of NTPC's enlarged capital, was offered in the IPO. The float, an equal mix of new shares and shares sold by the government, will lower state ownership to 89.5 percent.

At the offer price, NTPC would be valued at 511.2 billion rupees, making it India's fifth-biggest company by market value, slightly below state-run Indian Oil Corp., the nation's top refiner.

NTPC, which accounts for 27 percent of India's power generation, plans to help meet the growing demand by boosting its generating capacity by 9,370 MW, or 44 percent, by March 2007.

With an installed capacity of 112,058 megawatts (MW) by March 2004, India faced an energy shortfall of 7.1 percent last year. The government plans to add 41,110 MW capacity by March 2007.

UPSIDE SEEN

NTPC's pricing comes close on the heels of a sizzling stock debut by China Power International Development Ltd., which closed nearly 17 percent above its IPO pricing. China Power had raised $321 million.

Earlier this month, Japanese electricity wholesaler J-Power, which collected $3.4 billion in its offering, rose 6.5 percent at its debut.

Traders expect a strong listing for NTPC.

"The stock is quoting at about 72-74 rupees in the grey market," said Sandeep Jain at on-line brokerage Sharekhan.com. "It should open around that level irrespective of the market."

At 62 rupees, NTPC would trade at 11.7 times 2005 earnings, comparing favourably with China Power, which is going for 12.65 times predicted profit. Hong Kong-listed peers of China Power trade at between 12.7 and 15.6 times forward profits.

J-Power was the biggest IPO this year apart from a $4.4 billion sale by Belgian telecoms group Belgacom SA.

In August, Tata Consultancy Services Ltd., India's top software services exporter, raised 54.20 billion rupees in the country's biggest IPO.

Since listing in late August, TCS shares have risen 32.4 percent from their offer price, compared with a 12 percent gain in the key Bombay share index in the same period.

saikripa · #13 17th October 2004, 09:57 AM

National Thermal Power Corporation (NTPC) today finalised a price of
Rs 62 per share for its public offer, which closed on Thursday.The shares will list on excahnges on 5 Nov.

jnj · #14 28th October 2004, 10:13 PM

NTPC allotmnment on Karvy.com

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