NTPC listing makes employees richer by Rs 29 cr on Day One

Investors in National Thermal Power Corp’s IPO, including many of its 23,000 employees and retail investors, were rewarded on Friday wh...

Investors in National Thermal Power Corp’s IPO, including many of its 23,000 employees and retail investors, were rewarded on Friday when the government-owned power giant made an impressive debut on the stock exchanges.

After opening at a 12.9 per cent premium at Rs 70, the scrip moved up to finally close at Rs 75.55, a 21.8 per cent premium over the IPO price of Rs 62. This means new shareholders — who were allotted 86.53 crore shares in the IPO — saw an appreciation of Rs 1,173 crore for their holding on listing day.

Many of NTPC’s employees are also richer. In a clear indication that benefits of disinvestment can percolate to employees, NTPC’s workforce — who got 2.0615 crore shares — made a cool notional profit of Rs 29 crore on listing day.

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“The value creation for NTPC’s shareholders, including its employees, is indicative that PSUs are quality companies and priced reasonably. It’s a win-win situation for all. In fact, we are recommending our investors to buy NTPC even today,” said S Subramanian, Co-head, investment banking, Enam Financial Consultants.

With the NTPC IPO bringing good rewards to retail investors and employees, the market is expecting more PSU disinvestments in the coming months.

The public sector giant also leaped to third position in the market capitalisation ranking (total market value of all listed shares) at Rs 62,294 crore. Only ONGC (Rs 115,015 crore) and Reliance (Rs 75,355 crore) are ahead of NTPC.

	THE TOP TEN

			(Market cap: Rs crore) ONGC 115,015 RELIANCE 75,355 NTPC 62,294 TCS 55,878 INDIAN OIL 55,579 INFOSYS 52,959 WIPRO 48,059 HIND LEVER 29,220 BHARTI TELE 29,218 ITC 27,955

Thanks to NTPC, the total market capitalisation of Bombay Stock Exchange jumped by 5.74 per cent to Rs 13,83,554 crore from Rs 13,08,490 crore.

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Massive volumes were recorded on the NTPC counter on the day of debut. The combined volumes in the stock on the BSE and the NSE was a staggering 33.5 crore shares.

It has emerged as the biggest power company in terms of market cap and the second biggest public sector undertaking (PSU) in terms of market cap. NTPC, in which the government has an 89.5 per cent stake, has a paid-up equity of a massive Rs 8,245.46 crore.

“The NTPC stock was rightly priced. This is a landmark occasion for the company,” said CP Jain, chairman, NTPC, after the listing ceremony on the NSE. NTPC’s Rs 5,368 crore ($1.18 billion) IPO last month was subscribed 11 times. The government sold 10.5 per cent stake in NTPC, in the country’s second-largest initial public offer, last month. The government priced the issue at Rs 62 per share, at the top of the Rs 52-62 band.

However, the strong debut resulted in other power sector stocks trading lower as investors switched to NTPC.

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Investment bankers estimated that the NTPC IPO got retail applications of around 14 lakh, higher than nearest rival Tata Consultancy Services (TCS) Ltd, which received 12.5 lakh applications in its recent $1-billion plus mega IPO.