Domestic institutions rescue NTPC issue

The follow-on public offer (FPO) of power major NTPC did not appeal much to foreign institutional investors (FIIs) and was saved by public sector insurance companies and banks.

According to figures released by the National Stock Exchange, FIIs applied for only 18.44 million shares, or 4.5 per cent of the issue size. Domestic institutions, mainly public sectors insurance companies and banks, saved the day by applying for 397.5 million shares, or over 96 per cent of the total issue size of 412.27 million shares.

Domestic mutual funds bid for just 27.74 million shares. The response from the retail side was muted with small investors putting applications for only 23.5 million shares. The employee quota was subscribed 0.43 times and non-institutional by 0.43 times. The highest number of bids came at Rs 209, followed by Rs 202. Investment bankers said issuers would find it tough to price their FPOs as bankers and high net worth individuals became cautious during such high-volatility periods.

The Sensex has fallen 10.72 per cent in the last one month . In today’s special trading, NTPC shares closed at Rs 205.05, up marginally from Friday’s close.