NTPC Offer for Sale (OFS) at 5% discount – Should you invest?

NTPC OFS at 5% discount (August-2017) - Should you investNTPC Offer for Sale (OFS) at 5% discount – Should you invest?


NTPC Offer for Sale (OFS) would open on Tuesday i.e. 29th August 2017 for non retail investors and on 30th August, 2017 for retail investors (for 1 day). NTPC is a Maharathna Government Company. The government is selling 412 million shares or 5% stake, in a public offer through offer for sale (OFS) or auction route. NTPC share price was at Rs 173.35 on Wednesday, at the BSE and Govt. of India has fixed the floor price at Rs 168 (3% less from Monday price). Retail investors would get a 5 % discount on floor price. Should you invest in NTPC OFS? How is the share price performed in the last 1 year?

Also Read: 5 Best Stocks to invest as per Benjamin Graham Principles

About NTPC Limited


NTPC is India’s largest energy conglomerate with roots planted way back in 1975 to accelerate power development in India. Since then it has established itself as the dominant power major with presence in the entire value chain of the power generation business. From fossil fuels it has forayed into generating electricity via hydro, nuclear and renewable energy sources. This foray will play a major role in lowering its carbon footprint by reducing green house gas emissions. To strengthen its core business, the corporation has diversified into the fields of consultancy, power trading, training of power professionals, rural electrification, ash utilisation and coal mining as well.

NTPC became a Maharatna company in May 2010, one of the only four companies to be awarded this status. NTPC was ranked 400th in the 2016, Forbes Global 2000 ranking of the World’s biggest companies.

Details of NTPC Offer for Sale (OFS)


  • NTPC Ltd Offer for Sale (OFS) would open for 2 days for non retail investors (29th and 30th August) and 1 day for retail investors (30th August, 2017).
  • It would open at 9:15 am and closes at 3.30pm through separate windows of BSE and NSE.
  • NTPC share price has closed on Monday at Rs 173.35 per share at BSE.
  • Govt of India has fixed the floor price at Rs 168 which is ?% lower than Wed’s share price through its announcement to BSE.
  • Retail investors would get the discount of 5% on floor price. Means, they would get shares at Rs 159.6 per share.
  • Govt of India is planning to sell overall 5% stake for which it would get approx. Rs 7,000 Crores.
  • 20% of such shares are reserved for retail investors.
  • Retail investors can apply through their stock brokers / demat account for this OFS.

What is the purpose of the NTPC Offer for Sale (OFS)?


Govt. Of India plan to divest in several PSU companies. Minority stake sale happens through Offer for Sale (OFS).

How do you get a 5 % discount through this OFS?


Govt of India has fixed the floor price at Rs 168 which is 3% lower than Monday’s share price. Retail investors would get the discount of 5% on floor price, i.e. effective price is Rs 159.6 (approx.). When you apply through your demat account, you would be tagged as retail investors and discounted price would be automatically shown to you. If not, please contact your demat stock broker before applying. You cannot make any changes once you apply for that.

How is NTPC stock price in last 12 months?


On Monday, 28th August, 2017, NTPC stock price closed at Rs 173.35, up by 2.5% for the day.

1) The 52-week high of the share was Rs 177 and the 52-week low was Rs 145.

2) In the last 1 month, it touched high of Rs 177 and low of Rs 164.

3) Even in last 1 week, it was as high as Rs 175 and low of Rs 167.

4) In the last 6 months several leading stock brokerages like Edelweiss, ICICI Direct, Motilal Oswal, Reliance Securities and Geojit Research has recommended BUY for this stock with a target price ranging Rs 176 to Rs 198.

Also Read: Best Full Service Demat Account Providers in India

Should you invest in NTPC OFS of 2017?


Currently NTPC OFS Shares are offered at 8% below the trading price of Monday (3% lower than last traded price and 5% discount on traded price for retail investors). If you want to make money in short term for 5% to 20% by taking risk, you can subscribe to NTPC OFS. This stock moved from Rs 160 to Rs 173 in the last 1 year which is 8% return. Don’t expect this stock to be multi bagger. However this stock can provide moderate returns in medium to long term.

Disclaimer: I am not holding these shares as 28th August, 2017, however I may buy them in future.

If you like this article, please share this on your Facebook or Twitter. This would be a special gift which you would be giving to our blog.

Suresh

NTPC OFS at 5% discount (August-2017) – Should you invest

7 comments

  • Crazysid

    Hi Suresh,

    I have applied for it through HDFC Securities. They have deducted amt as 168 per share. I asked the customer care and they said the 5% discount would be refunded after allotment is done. Is that true ? 

    How many days will they take to finalize the allotment ?

    • Generally if you tick “retail investors, while 168 rate would be quoted, the amount which gets blocked / deducted should be only after 5% discount. However, you should raise ticket with HDFC Securities to ensure they do not make wrong statements

      • Crazysid

        Thanks Suresh for the response.  Just fyi…

        They have deducted amount as per 168+brokerage(0.7%) and then deposited back the discounted amt as per the allotment rate. 

        I thought with an intention of making profits by selling the next day they allot. They alloted but now the share price is down.  Any thoughts on this ? 

         

  • Ganesh Godik

    Useful information

  • Abhishek Gupta

    NTPC is Maharatna Company not Miniratna.

Leave a Reply

Your email address will not be published. Required fields are marked *