O’Melveny & Myers has served as international legal counsel to the issuer in the further public offering (FPO) of NTPC (formerly National Thermal Power Corporation) by the government of India’s Department of Disinvestment.
The FPO, in which the Indian government divested approximately 5% of its equity in NTPC, was the first Indian public offering to adopt the French auction model for book building. The offering comprised 412.27 million shares at a floor price of Rs201 (US$4.40). The public issue was oversubscribed, raising approximately US$1.8 billion.
A French auction is a uniform-price auction used for pricing initial public offerings in France. A company normally announces a minimum (reserve) price, after which investors place sealed bids for quantity and price. Once all the bids have been submitted, the company negotiates a minimum and maximum price with the market regulator. Any bid above the maximum price is eliminated as a virtual market order. Bidders who bid between the minimum and maximum price are awarded shares on a pro rata basis, each paying the minimum price.
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