MUMBAI: Its the first big-ticket divestment of the year. State-owned power producer NTPC will hit the markets with its follow-on public offer (FPO) in two days. The price band is yet to be declared but marketmen estimate it to be in the range of Rs 220-230 per share.

Going by this number, the government will be looking to mop up about Rs 8,500- 11,000 crore. Market players are confident that the issue will be fully subscribed even in these shaky markets.

NTPC will be the third company to be divested in the current programme after NHPC and Oil India. NHPC managed to raise Rs 4,200 crore and oil India Rs 2,770 crore. Currently, Oil India trades at a premium of over 10% to its issue price where as NHPC trades at around the IPO price.

NTPC, in its IPO in November 2004, had issued shares at Rs 62. Today, NTPC is trading at Rs 211/share,  and the company expects the FPO price to be at a premium to the current price.... At the closing price today, the company is valued at Rs 1.73 lakh crore....

NTPC currently has over 31,000 Mw of installed capacity & an additional 18,000 MW is under construction... this will make it the largest power generating company in Asia. The company currently has a debt-to-equity ratio of 0.6:1, which is much lower than the industry average....

Analysts say that if the FPO price comes in below Rs 220, it may be positive for investors....

In the pipeline
Power Grid                    FPO                 3000 cr
Coal India                      IPO                  3000 cr
Hindustan Copper       FPO                 4000 cr
HPCL                              FPO                 5000 cr           
NMDC                             FPO                14,000 cr

Valuations (P/EFY10)
Adani Power             46 X
GVK Power              36 X   
NTPC                       20 X
Siemens                32 X
Reliance Power    64 X