Subscribe to NTPC FPO with long term view: Hem Sec

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Subscribe to NTPC FPO with long term view: Hem Sec

Hem Securities has come out with a research report on NTPC's follow-on public offering (FPO). The research firm has recommended investor to subscribe the issue for long term investment horizon.

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Hem Securities has come out with a research report on NTPC 's follow-on public offering (FPO). The research firm has recommended investor to subscribe the issue for long term investment horizon.

The FPO of India's largest power generation company NTPC opened for subscription. The floor price for the FPO of 412,273,220 equity shares of Rs 10 each is at Rs 201/share and the issue will close on February 5, 2010. The issue has been subscribed 0.79 times so far, as per data available on the NSE website.

Hem Securities report on NTPC FPO -

The company is bringing the offer at floor price of Rs 201/share which will turn into P/E multiple of 18.92 at post issue consolidated annualized EPS of Rs 10.92 while peers like Torrent Power, Tata Power, Neyvelli Lignite, are trading at P/E multiple of more than 20. Incorporated in 1975 and conferred with the status of "Navratna" by the GoI in 1997, company has a strong track-record to turn around inefficient plants and enhance the efficiency levels significantly.

Also being leader in India's power sector both in terms of installed capacity and generated output, company is well poised to cater future business opportunities available in power sector. Hence we recommend investor to subscribe the issue for long term investment horizon.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment