Shares of newly listed NTPC Green Energy Ltd. closed 10% higher on Tuesday, as free float declined and demand for shares rose.
The green utility firm saw a delivery of 35.5% on the NSE on Tuesday, higher than the market average. But it is the free float which is causing the stock to rise.
NTPC Green IPO raised Rs 10,000 crore, offering 11% equity of the company. The current free-float of the shares is just 6.6%, according to the NSE and that too seems on the high side as institutions have acquired further shares upon listing.
On Tuesday, the total turnover of the company on the NSE stood at Rs 883.60 crore, that is, 11% of the free float market cap of the company.
Superficial Free Float
Free float of NTPC Green is much lower than what has been disclosed, as significant shares have been acquired by mutual funds and insurance companies subsequent to its listing.
At the time of listing, freely available shares for trading with the institutions stood at 2.90% of equity, while freely available shares with non-institutions stood at 3.74%, as per NDTV Profit estimates.
Since its listing on Nov. 27, the free float of non-institutions has declined and institutions have warehoused NTPC Green shares as part of its portfolio requirement, bringing down the overall free float in the stock.
NTPC Green shares have risen by over 31% since listing. The largest public shareholder in the company is Life Insurance Corporation of India, which held 1.2% on the day of listing, according to shareholding pattern available on the exchanges.
Nearly 4.35% of the equity was issued to anchor investors, with half of the anchor shares or 2.18% of the equity coming out of lock-in only after Dec. 24, hence available for trading post Christmas.
The remaining half will be released from lock-in post Feb. 22, 2025.
NTPC Green shares will likely see share price hike every time there is delivery based buying that exceeds 2-3% of the free float in the stock markets.
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