NTPC today, 2 February 2010, said it has fixed the base price at Rs 201 a share for its follow-on-public offer (FPO), which remains open for bidding between 3 and 5 February 2010.

The floor price was set by the Empowered Group of Ministers' (EGoM) in a meeting held on 1 February 2010, NTPC said in a filing to the BSE today, 2 February 2010. The EGoM has also approved offering a Rs 10 per share discount to employees subscribing shares in the said offer, thereby fixing the floor price for the employees at Rs 191.

The government currently holds an 89.5% stake in NTPC and it plans to dilute 5% through its proposed FPO. At the floor price, the government would mop up Rs 8,286 crore.

This is the first public issue which is adopting the French Auction route to raise funds. Under the French Auction model, institutional buyers are free to bid above a certain floor price. The highest bidder gets preference during the allotment of shares.

Earlier in October 2004, NTPC had raised over Rs 5,000 crore through an initial public offer (IPO). That time, the public offer involved issue 5.25% of fresh equity shares and sale of equivalent 5.25% number of shares held by the government.

India's largest power generation firm by capacity NTPC, with an installed capacity of over 31,134 megawatt (mw) is expanding its capacity by 22,000 mw by the end of the March 2012 to become a 50,000-mw company.