Government to disinvest 3.5% stake in NHPC through OFS; stock declines

Shares of NHPC, a public sector power company, slipped over 4 per cent in Thursday's trade (January 18) after the government proposed to disinvest a 2.5 per cent stake through an offer for sale (OFS). The floor price for the same is set at Rs 66 per share.

"The floor price of the offer shall be Rs 66.00/- (Rupees sixty-six only) per equity share ("floor price")," the filing read.

At around 9:26 a.m., shares of NHPC slipped 4.33 per cent, or Rs 3.16, to Rs 69.9 apiece on the BSE. The market capitalisation of the company at around the same time stood at Rs 70,214.79 crore.

On Wednesday, after market hours, NHPC, through a filing, informed investors that the government had proposed to disinvest in the company through OFS, and its base size was set at 25.1 crore shares, which translates to a 2.5 per cent stake. Further, the filing read that a green shoe option has been fixed up to 1 per cent or 100,450,348 shares.

"The Seller proposes to sell 2.5% of the paid-up equity (equivalent to 251,125,870 equity shares) shares held in the company having a face value of Rs 10/- each.... with an option to additionally sell up to 100,450,348 equity shares, i.e., 1.00% of the paid-up equity of the company ("the oversubscription option") (hereinafter referred to as "offer shares")," the filing read.

Through the OFS, the government is likely to raise Rs 2,000 to 3,500 crore. The OFS is open for non-retail investors on January 18 and for retail investors on January 19. It should be noted that cancellation of the offer shall not be permitted during the bidding period.

NHPC share price: Past performance 

In a year, shares of NHPC have gained over 65 per cent against the Nifty 50's rise of over 17 per cent.

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