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.
