NTPC is set to launch its follow-on public offering (FPO) in the first week of February. India’s largest power generator aims to raise Rs 8,000-11,000 crore through the process, according to sources familiar with the development.
The government has appointed four investment bankers — JP Morgan, Citigroup, Kotak Mahindra Capital and ICICI Securities — to steer the issue.
“Earlier, we were trying to launch the FPO in the last week of January, but now it would be possible only in the first week of February,” said a source involved in preparing the strategy for the floatation.
The proceeds will be used up entirely by the government, and will be accounted for in the 2010 Budget.
That’s because NTPC is a cash-surplus company and is in no need of funds, say sources.
NTPC has earmarked a capital expenditure of Rs 60,000 crore for the current plan period.
NTPC’s current generation capacity is over 30,000 mw and it plans to scale this up to 50,000 mw by the end of the XIth Five-Year Plan in 2012.
These include projects at Dadri, Mouda, Jhajjar, Vindhyachal, Sipat, Rihand, Simhadri, Barh and Korba, which are under construction and would be commissioned by then.
NTPC had, through its initial public offering in 2004, raised around Rs 5,300 crore. The government had then divested 5% stake in the company, while another 10% fresh equity was raised.
The company’s FPO was postponed in 2008 due to the global financial crisis, which hurt valuations.
NTPC also plans to enter the nuclear and renewable energy space.
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