Another Government of India 'Navratna', NTPC, got listed on the domestic bourses this month. The company's initial offer, which closed on October 14, 2004, was oversubscribed 11 times. And the investors' enthusiasm was such that it got listed at a huge premium of Rs 88 on NSE on November 5, 2004, as against the issue price of Rs 62 per share. Mutual funds were also not left behind. In all, mutual funds received 4.5 per cent of the total issue size of 8,658.3 lakh shares.
Understandably, 61 per cent of the total shares allotted to mutual funds belonged to diversified equity funds. In all, 131 funds of 19 different AMCs participated in the company's IPO--58 diversified equity funds, 26 MIPs, 18 equity-oriented hybrid funds, 14 debt-oriented hybrid funds, 11 tax-planning funds and four asset allocation funds. And India's biggest equity fund--Franklin India Bluechip got the maximum of the pie (33.98 lakh shares). In terms of per cent of net assets allocation to NTPC shares, the three SBI funds topped the list--Magnum Taxgain (4.88 per cent), Magnum Balanced (4.7 per cent) and Magnum Contra (4.03 per cent). Interestingly, Reliance Diversified Power Sector just invested 1.84 per cent of its total assets in the company's IPO.
UTI Mutual Fund received the maximum number of NTPC shares accounting for 28 per cent of the total shares allotted to mutual funds, spread over its 27 schemes. UTI was closely followed by Franklin Templeton, which got 21 per cent of the total mutual fund allocation spread over 10 schemes. Both these fund houses together with HDFC Mutual Fund accounted for 61 per cent of the total pie allocated to mutual funds.
NTPC was incorporated in 1975 and has grown into the largest power utility of India. In nearly 30 years, it has remained among the world's top-10 power generation companies. The company has also been granted the Navratna status, which provides it with strategic and operational autonomy including the ability to make investment decisions without government approval.
Recently, NTPC has moved up the value chain and entered down stream businesses like power trading and distribution, which will help in margin expansion as well as take advantages of opportunities that come by way of changing regulations. Overall, NTPC has been and will remain one of the attractive power companies in India. And if your fund has this stock in its portfolio, you surely would have made gains. After three days of its listing, NTPC was trading at Rs 75.15--a strong premium of 21 per cent over the issue price of Rs 62.
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