Government's 5 per cent stake sale in India's largest power producer NTPC got off to a thumping start on Tuesday with the institutional investors portion getting oversubscribed within two hours of opening of trade.
Of the over 32.98 crore shares on offer for institutional investors, bids for over 38.92 crore shares or 1.18 times the shares on offer have come in during the first two hours of trade.
Bidding would open for retail investors, for whom 20 per cent shares are reserved, on Wednesday.
The government is selling over 41.22 crore (412.2 million) shares or 5 per cent stake in NTPC at a floor price of Rs 122 a piece.
If fully subscribed, the stake sale would fetch Rs 5,030 crore (Rs 50.3 billion) to the exchequer.
In the secondary market, the scrip was trading at Rs 124.70, down 1.69 per cent over the previous close.
The share sale is the first under Securities and Exchange Board of India's revised offer for sale rules that allow the bidding for shares spread over two days.
The floor price of Rs 122 a piece was at a 3.82 per cent discount to Tuesday's closing price of Rs 126.85 on BSE.
While the issue opened for institutional bidders on Tuesday, the retails investors, for whom 20 per cent shares have been reserved, will get to bid tomorrow.
NTPC is the first company to hit the markets under the revised OFS guidelines of market regulator Sebi.
The bidding would continue till 1530 hours on both the days.
A 5 per cent additional discount would be offered to retail investors, which are those who bid for shares worth not more than Rs 200,000.
SBICAP Securities, ICICI Securities, Edelweiss Securities and Deutsche Equities are acting as merchant bankers for the share sale.
The Cabinet in May had approved the 5 per cent stake sale in NTPC.
The government holds 74.96 per cent in the firm.
It had last sold stake in NTPC in February 2013.
NTPC would be the sixth PSU to hit markets in the current fiscal.
The disinvestment department has held roadshows in Singapore, Hong Kong, London and in the US.
So far this fiscal, government has raised over Rs 13,300 crore (Rs 133 billion) through disinvestment in five public sector units -- EIL, Indian Oil Corporation, PFC, REC and Dredging Corporation.
This is against a target of Rs 69,500 crore (Rs 695 billion) for 2015-16.
Volatile market conditions have affected the government's disinvestment plan, which mostly have commodity and oil stocks in the pipeline.