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NTPC FPO falters: Govt may scrutinize auction route
The government is likely to analyse the FPO of NTPC, which took place earlier this month, and was carried out via the 'French auction' route -- used for the first time for such offers, CNBC-TV18 reports uoting sources.
The government is likely to analyse the follow-on public offer (FPO) of state-run power producer NTPC , which took place earlier this month, and was carried out via the 'French auction' route - used for the first time for such offers, CNBC-TV18 reports quoting sources.
During the FPO, the government sold part of its 41 crore shares in the power major via the alternative book building method in which investors place sealed bids for quantity and price and a decision is arrived at in consultation with the market regulator.
However, the issue saw a subdued response: it was subscribed 1.2 times overall and retail portion subscription was acutely lukewarm.
The first point of criticism seemed to be that people neither comprehended nor executed the French auction process properly.
CNBC-TV18 learns the government is likely to analyse the NTPC issue to learn some lessons like what may have gone wrong.
However, sources add, the government may still consider taking the French auction route for future issues and that the development does not imply a future decision has been taken.
