NTPC has decided to graciously give “Bonus Debentures” to all its shareholders. If you own a share, you get a debenture free. (It’s not “free” really, because nothing ever is, but we’ll get to that). The concept is that you get a debenture for no further payment. Why? Because you see, the government has a bloody deficit. What? What’s the connection between the government’s deficit and NTPC’s bonus debentures? Deepak, are you getting senile, old man? I object to being called senile in my old age. I was senile when I was much younger. But we digress. NTPC’s Doing What? From the press release , NTPC has truckloads of cash and “free reserves”. 72,418 cr. worth of free reserves – basically, accumulated profits over many years. They have 824 cr. shares out there. For each share, they will issue one debenture (for no payment required) to the shareholder. Each debenture has a face value of Rs. … (Read On…)
[via Capital Mind]
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