NTPC's tax-free bond issue oversubscribed 3.3 times

 
State-run power major, NTPC on Tuesday received an overwhelming response for its bond issue by garnering Rs 3,310 crore, much ahead of its scheduled closing.

"The issue was oversubscribed by 3.3 times. As against Rs 1,000 crore, NTPC has already collected about Rs 3,310 crore, Rs 2,310 crore above the base size," the company said in a statement.

The tax-free bond issue which opened on Monday was earlier scheduled to close on December 16 but will formally close Wednesday, a company official said.

This is the state-run company's first bond issue after a gap of over 20 years.

Under the offer, the company issued tax-free secured redeemable non-convertible bonds.

The base issue size aggregates to Rs 1,000 crore with an option to retain over-subscription up to Rs 750 crore for issuance of additional bonds, aggregating up to Rs 1,750 crore.

The funds raised through the issue would be utilised towards funding of capital expenditure and refinancing for meeting the debt requirement in ongoing projects.

The company in the statement said the QIB (Qualified Institutional Buyers) oversubscribed by 4.2 times, garnering Rs 423 crore against allocation of Rs 100 crore.

"Corporates contributed Rs 1,374 crore against allocation of Rs 250 crore, oversubscribed by 5.5 times," the statement said, adding that HNI (High Networth Individuals) also chipped in with Rs 851 crore against allocation of Rs 250 crore and over-subscription of 3.4 times.

The company, last month, filed a prospectus with the Registrar of Companies (RoC), Delhi and Haryana in connection with its proposed public issue of tax-free secured redeemable non-convertible bonds, NTPC said.

The lead managers to the issue are ICICI Securities, A K Capital Services, Axis Capital, SBI Capital Markets and Kotak Mahindra Capital Company.

Currently, NTPC has a capacity of nearly 42,000 MW and targets to add about 14,000 MW to its total capacity by the end of 2016-17.

Shares of NTPC closed at Rs 145.70 apiece, down 1.09 per cent on the BSE.

PowerGrid FPO subscribed 69% on first day

 
The follow-on-public offer (FPO) of PowerGrid Corporation of India (PGCIL) was subscribed 69 per cent on the opening day on Tuesday. Of the 78.70 crore shares offered for sale, total bids for 54.32 crore shares were received, as per the data available on the bourses.

As many as 72.98 lakh bids came at the cut off price of the issue.

The shares are being offered at a price band of Rs 85-90 apiece and the issue would remain open till December 5 for institutional buyers and December 6 for retail investors.

Shares of PGCIL closed at Rs 93.75, up 0.37 per cent on the BSE.

The sale of 78.70 crore shares, or 17 per cent stake, could fetch around Rs 7,083 crore at the upper end of the price band. The company may garner close to Rs 5,717 crore, while the government may receive around Rs 1,758 crore.

Last month the Cabinet had cleared the FPO of PGCIL, which will comprise 13 per cent fresh equity by the company and 4 per cent stake sale by the central government.

The government is selling 18.51 crore shares in PGCIL, while the company is issuing fresh 60.18 crore shares through the offer. Of the fresh shares, about 2.4 per cent will be reserved for the employees.

As much as 50 per cent of the net issue is allocated to Qualified Institutional Buyers (QIBs), 35 per cent for retail category and 15 per cent for High Network Investors (HNI).

Above 0.38 per cent of the issue is reserved for employees.

Retail category and employees shall be given a discount of 5 per cent on the issue price.

The government holding in the company will come down to 57.89 per cent from the present level of 69.42 per cent.

Citigroup, ICICI Securities, UBS, SBI Caps and Kotak Mahindra are merchant bankers for the FPO.

This is the second follow-on offering from PGCIL, which sold a 10 per cent stake along with a similar stake divested by the government in November 2010 at an issue price of Rs 90 a share.

The company hit the capital market with initial public offering in October 2007.

So far in the current fiscal, the government has raised over Rs 1,300 crore through minority stake sale in PSUs.

It has set a target of Rs 40,000 crore from disinvestment in current fiscal.

PowerGrid plans to utilise proceeds worth over Rs 5,700 crore from follow-on public offer, towards transmission projects and general corporate purposes.

Speaking to reporters, PowerGrid Chairman and Managing Director R N Nayak said the company intends to utilise the net proceeds of the offer to "meet the capital requirements for the implementation of certain identified transmission projects and general corporate purpose".

Merger and acquisition policy in telecom gets EGoM nod

 
The empowered group of ministers ( EGoM) on telecom, headed by Union finance minister P. Chidambaram, on Tuesday cleared the merger and acquisition (M&A) policy for the telecom sector raising the market dominance criterion to 50 per cent of the market share in terms of subscriber base.

In a merger, the resultant entity has to pay market rates for holding spectrum above 4.4 MHz that was allotted to the companies administratively at old rates.

If two entities which are merging hold airwaves purchased through auctions, they will not have to pay market rate for spectrum, sources said, adding that it has also been decided to put a cap on spectrum a final entity can hold in an area.

However, the merging companies will have to comply with the lock-in clause for sale of equity.

The telecom sector's first M&A rules paves ways for consolidation in the Indian telecom market where there are about 12 players including Bharti Airtel, Vodafone, BSNL, Tata Teleservices, Videocon and Aircel.

"The M&A guidelines have been finalised and the quantum of spectrum that will be put up for auction in the 2G band has also been finalised," Telecom Minister Kapil Sibal said after the meeting.

According to sources, the EGoM has approved sale of 403.2 Megahertz of 2G spectrum in 1800 Mhz frequency band, which at the base price finalised by the ministerial panel amounts to about Rs 36,385 crore.

The EGoM in its last meeting had also approved sale of premium spectrum in 900 Mhz band in three metros- Delhi, Mumbai and Kolkata held by licences of Airtel, Vodafone and Loop Mobile that are due to expire in last quarter of 2014.

The total quantum of spectrum getting freed in the three metros is about 46 Mhz, which amounts to about Rs 12,300 crore at the base rate finalised by the EGoM in its last meeting.

Together, the 900 Mhz and 1800 Mhz band airwaves are valued at about Rs 48,685 crore.

The government in the Budget has provisioned about Rs 41,000 crore from spectrum revenue, which included upfront money from auction and various fees levied on airwaves used for commercial mobile communications.

Gold prices down in futures trade on weak global cues

 
Gold prices moved down by 0.31 per cent to Rs 28,739 per 10 gram in futures trade on Tuesday as speculators trimmed their exposures, tracking a weak trend overseas.

At the Multi Commodity Exchange, gold for delivery in February next year eased by Rs 90, or 0.31 per cent, to Rs 28,739 per 10 gram in business turnover of 201 lots. Likewise, the metal for delivery in far-month April 2014 shed Rs 84, or 0.29 per cent, to Rs 28,410 per 10 gm in three lots.

Market analysts said a weak trend in the overseas markets after signs of a strengthening US economy fuelled speculation that the Federal Reserve is ready to slow the pace of its monetary stimulus mainly weighed on the gold prices at futures trade here.

Globally, gold fell 2.5 per cent to $1,218.80 an ounce in New York in previous session.

BSE Sensex down in morning trade on profit booking

 
The BSE benchmark Sensex wiped off its Monday's gains and was trading over 20 points down in morning trade on Tuesday as funds and retail investors booked profits after recent gains.

At 10.16 am, Sensex was down 25.66 points at 20872.35. Similarly, Nifty was down 10.10 points at 6207.75 during the same time.

Brokers said besides profit-booking by participants, a mixed trend at the Asian markets, influenced the sentiment.

The 30-share barometer, which had gained 477.75 points in the previous three sessions, moved down by 49.42 points, or 0.24 per cent, to 20,848.59 in early trade, led by the weakness in banking, FMCG, realty and power sector stocks.

Similarly, the wide-based National Stock Exchange index Nifty, moved down 14.85 points, or 0.24 per cent, to 6,203.00.

In the Asian region, Nikkei at the Japan stock market, was trading 0.59 per cent higher, while Hong Kong's Hang Seng index shed 0.63 per cent in early trade on Tuesday.

The US Dow Jones Industrial Average ended 0.48 per cent down in Monday's trade.