SP Tulsian, sptulsian.com is quite apprehensive on the success of OFS issue and maybe a floor price of Rs 142 or so should be fixed by the government.
Tulsian told CNBC-TV18, "In case of NTPC the government has to really work very hard. If you see the case othe National Mineral Development Corporation (NMDC) and Oil India, in NMDC the Foreign Institutional Investor (FII) holding was 0.5 percent, in Oil India FII holding was 1.5 percent and they had very good appetite. But if I take the case of NTPC the FIIs are already holding 4.5 percent, so they will not be having much of the appetite.”
He further added, “If I go by their financial performance maybe an EPS of Rs 13-13.5 for FY13 making the stock to rule at about 11 times. So maybe a PE multiple of single digit and because of the size of the issue, the OFS is of about Rs 12,000-13,000 crore, even if I accept that 7-8 percent discount from hereon, so I think in my view the floor price has to be anywhere between Rs 140-142.”
"I do not think that for this issue the response is going to be really warm from the FIIs and all that, maybe the Life Insurance Corporation (LIC) has to come to the rescue. So I am quite apprehensive on the success of this issue and maybe a floor price of Rs 142 or so should be fixed by the government."
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
