NTPC drop 6% as stock goes ex-bonus

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Shares of state-owned power utility NTPC ended over 6% lower on Friday as the eligibility date to receive 'bonus debentures' ended. The stock ended at 145.5, down Rs 9.7, or 6.25%. NTPC is offering one bonus debenture for every one share held in the company. Bonus debentures are dividend-yielding securities offered in lieu of dividends.

In December, the company's board had approved issue of bonus debentures from free reserves. The debentures will be listed on exchanges and will be redeemable at the end of 8th, 9th and 10th year in the ratio 20%, 40% and 40%.

The coupon rate on these debentures will be adjusted every year and will be pegged to yields on the government securities. Broking firm KR Choksey in a recent note had projected the debentures will yield anywhere between 9.25% and 14% to investors.