NTPC may adopt French Auction for FPO - Indian IPO Blog

Sunday, January 24, 2010

NTPC may adopt French Auction for FPO

National Thermal Power Corporation (NTPC) Limited, the largest power generation company in India, is going to come up with a Follow-on Public Offer (FPO) The Company is likely to adopt French Auction route for the pricing of FPO. The FPO would consist of 412,273,220 equity shares of Rs 10 each.

A French Auction is a uniform-price auction used for pricing initial public offerings in France. In this offering, the firm announces a minimum (reserve) price. Investors place sealed bids for quantity and price. When the bids are in, the firm negotiates a minimum and maximum price with the market regulator

Any bid above the maximum price is eliminated as a virtual market order. The 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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