Government to sell additional 1% stake in NHPC as OFS gets overwhelming response

MUMBAI – Following an overwhelming response to the offer for sale (OFS) of NHPC from institutional investors, the government has decided to exercise the greenshoe option and sell an additional 1% stake in the renewable energy major.

On Wednesday, the government announced plans to sell 251,125,870 shares, representing a 2.5% stake in NHPC, and set the floor price at Rs 66/share. This was at a steep discount of nearly 10% to the closing price of the stock.

Further, the government said it would sell an additional 100,450,348 shares, representing a 1% stake, in case of an oversubscription.

The OFS which opened for institutional investors on Thursday, was subscribed a whopping 403%.
The government received bids for 91,16,20,840 shares, against 22,60,13,283 shares on offer for institutional investors. The bids were received at an indicative price of Rs 68.50/share, tad higher than the floor price.

On Thursday, shares of NHPC ended 2.6% lower on the National Stock Exchange at Rs 71.10, after hitting a low of Rs 68.55 intraday.

The OFS will open for retail investors on Friday, and the government has reserved 10% of the issue size for them.

As of December end, the government held nearly 71% stake in the PSU major.

So far in the current fiscal year, the government has raised a little over Rs 10,000 crore through disinvestment. The last OFS that it did was in SJVN in September, through which it raised Rs 1,349 crore.

The government successfully sold stakes through OFS in Coal India, Hindustan Aeronautics, Housing and Urban Development Corporation, IRCON International, Rail Vikas Nigam, and SJVN so far in the current fiscal year, aided the strong momentum in equities.

Power stocks have rallied significantly over the last year, aided by the strong demand, capacity additions, and government’s increased focus on renewable energy.

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