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LIC buys 60% of NTPC shares on offer; ups stake to 12.98%

Life Insurance Corporation of India (LIC) has bought almost 60% of the NTPC shares sold by the government, taking its stake in India's biggest power producer to 12.98%.

The government has sold the shares in order to raise Rs 5,030 crore through a disinvestment. State-run LIC's stake increased from 10.03% at the end of the December quarter subsequent to its participation in NTPC offer for sale (OFS) that occurred on February 23-24. LIC bought more than 24.31 crore shares or 2.95% of NTPC during the OFS.

As per a stock exchange filing, LIC is now holding more than 107.05 crore shares or 12.98% stakes in NTPC. The government had sold more than 41.22 crore shares or 5% stakes in NTPC at a floor price of Rs 122 a piece.

More than 32.98 crore shares were offered to institutional buyers on February 23 whereas the remaining over 8.24 crore share were kept reserved for retail investors.

Though institutional investors' piece was oversubscribed 1.8 times, the demand from retail investors was lusterless with bids coming in for just 44% of the shares set aside for them. The unsubscribed part of retailers was then offered to institutional buyers.

In August 2015, LIC had bought almost 90% of Indian Oil Corporation (IOC) shares sold by the government in its Rs 9,379-crore disinvestment.

The stock of NTPC closed up 2.41% or Rs 2.85 at Rs 121.35 per scrip on the BSE on Friday.