NTPC follow-on throws French auction system into question

The combination of a falling market and one large buyer crowding out the rest leads to a poorly subscribed transaction.

It may have enabled the Indian government to squeeze the maximum amount of money out of its 5% sell-down in India's largest power producer, but aside from that, the use of a so called French auction to sell the shares seems to have replaced one flawed system with another.

The final allocation has yet to be announced, but according to sources, the government will raise approximately Rs84.8 billion $1.8 billion from the sale of NTPC shares, which was completed last...

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