The second CPSE disinvestment of the last quarter of the fiscal year 2015-16 broke with the falling trend in the market with the NTPC OFS getting oversubscribed 1.8 times on a day when the Sensex Declined by 1.59% or 378.61 points.

On offer was 5% paid-up capital of the company comprising 41, 22, 73,220 shares, each of FV of ₹ 10. Out of the shares on offer for sale, 20% are reserved for retail investors i.e. those investors who place bids for shares of total value of not more than ₹ 2.00 lakh.

As per the new SEBI guidelines only non retail investors were allowed to place their bids today (T Day) for 80% of unreserved portion. The retail investors shall bid tomorrow (T+1) for 20% of the portion reserved for them and they will have the option to place a price bid or opt for bidding at cut off price. The new arrangement provides retail investors the benefit of discovering the cut off price of T day and place their bids on T+1 day on a more informed basis than was the case earlier. As usual retail investors will in addition be entitled to a 5% discount. The discount to retail investors shall be applicable to bids received on T+1.

Unsubscribed portion of the shares reserved for retail investors shall be allocated to non retail bidders on T+1 day at a price equal to cut off price or higher as per bids. In this regard, option shall be provided to such non retail bidders to indicate their willingness to carry forward their bids to T+1 day. Effectively the bidding for the OFS will remain open for two days.

With this disinvestment, the Government of India share in NTPC will come down to 69.96%.

At the end of the day with total subscription of ₹ 7287.57 crore the issue stood oversubscribed by 1.80 times.

The indicative price was 122.22 which is above the floor price. The previous day (22/02/2016) closing price was ₹ 126.85 (BSE)/ ₹ 127 (NSE) and floor price was fixed at ₹ 122.

The highlight of the issue has been the encouraging FII participation of ₹ 925.45 crore which works out to be 22.96%.

 The issue was marked by robust all round participation from different categories:

S.No	Category	Value (Rs. crore)
1	Retail	20% bidding on 24/02/16
2	Mutual Funds	436.57 (10.83%)
3	Banks (public & private)	497.74(12.35%)
4	Insurance Companies (public & private)	5325.33 (132.11%)
5	FII	925.45(22.96%)
6	Others (proprietary, HNI ETC)	102.48(2.54%)
	Total	7287.57

Retail reservation in OFS enables separate bidding days for informed retail bids and reallocates unsubscribed shares to non-retail. SEBI-directed OFS procedure split bidding into two days: non-retail bidders bid on T day for the unreserved portion while retail bidders bid on T+1 informed by T day's cut-off price; retail bids may be priced or at cut-off and receive a retail discount. Non-retail bidders could opt to carry forward bids to T+1, and any unsubscribed retail allocation is to be reallocated to non-retail bidders at the cut-off price or higher per bids, keeping the OFS open effectively for two days.