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Last Updated : Feb 06, 2013 07:30 PM IST | Source: CNBC-TV18

NTPC attractive but not best investment opportunity: Expert

In an interview to CNBC-TV18, Prithvi Haldea, chairman and managing director, Prime Database gives his views on National Thermal Power Corporation's (NTPC) floor price


In an interview to CNBC-TV18, Prithvi Haldea, chairman and managing director, Prime Database gives his views on National Thermal Power Corporation's (NTPC) floor price. The government has set the NTPC offer for sale (OFS) floor price at Rs 145 per share. Read here.

Haldea expects some FII interest in the share. "There could be a foreign institutional investor (FII) appetite because the quantity on offer is substantial," he says.

However, he isn't too bullish on the stock. "At this price, the stock looks reasonably attractive but it is not a great investment opportunity from a trading point of view or an arbitrage point of view where you buy today and sell tomorrow," he adds

Below is the edited transcript of Haldea's interview to CNBC-TV18.


Q: You like steep discounts especially when we are taking about disinvestment. This time around it is about 4.5 percent discount on the NTPC floor price at Rs 145 a share. What do you think of it?


A: When I talk about steep discounts, I mean it for the retail. We have completely ignored that segment of the market, we keep making announcements that we should increase the retail base and we should get more and more retail investors. However, when it comes to taking action and PSUs could be the best way going forward to get more retail investors, we tend to become slightly ignorant of the retail investors.


However, commenting on the price that the government has announced, as we expected, the offers are already full of all bailout kind of institutions to ensure that the NTPC issue does get all the money that it needs. The gap between the market price and the offer price is only Rs 4-5. The company has closed at Rs 151 today and at Rs 145 the arbitrage opportunity is not very significant. However, if you look at the month high, the stock had hit Rs 164, so there is almost Rs 20 fall since then.

There could be a foreign institutional investor (FII) appetite because the quantity on offer is substantial. We are talking about 78 crore shares and there would be long-term institutions who may like to come in and bid for large quantities, because at this price, the stock looks reasonably attractive but it is not a great investment opportunity from a trading point of view or an arbitrage point of view where you buy today and sell tomorrow.



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First Published on Feb 6, 2013 06:20 pm
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