Wednesday, 2 September 2009

NTPC and REC follow-on offers to hit the market this fiscal

State-owned utilities NTPC and Rural Electrification Corp will hit the capital market with their follow-on public offers to raise about Rs 9,000 crore by the end of the current financial year.

"NTPC and REC follow-on issues will come up before March 2010," Power Secretary H S Brahma told reporters here.

The government is likely to divest 10 per cent of its holding in the country's largest power generator NTPC, which also plans to offer 10 per cent fresh equity and hopes to raise Rs 6,000 crore through this follow-on offer.

NTPC would utilise the proceedings from this issue to part fund its capital expenditure plans of Rs 1,60,000 crore during the current XIth Five Year Plan Period (2007-12).

The company has set a target of achieving power generation capacity to the tune of 50,000 MW by 2012 from the current 30,000 MW.

REC on the other hand is awaiting cabinet approval for its FPO. The company wants the capital raised to disburse loans to power projects. It would issue about 17 crore shares of Rs 10 face value each. Considering the current market situation, the company is hoping to fetch about Rs 2,900 crore through premium to be decided later.

Source: EconomicTimes

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