Indian Government Sells 6% Stake in NHPC for Rs 4,200 Crore

The Indian government has announced plans to sell up to 6% stake in NHPC through an offer for sale (OFS) at a floor price of Rs 71 per share, marking the third OFS of a public sector company in the current fiscal year.

Government Launches NHPC OFS to Raise Funds

The government has set a base offer of 3% of NHPC’s equity and an additional 3% Green Shoe Option in case of oversubscription. The floor price of Rs 71 per share is at an 8% discount over Monday’s closing price of the scrip at Rs 77.19 on the BSE.

Shares of NHPC closed down 2.07% over the previous close, indicating a volatile market sentiment ahead of the OFS.

Key Details of the OFS

The OFS will open for non-retail investors on June 2, and for retail investors on June 3. The sale of over 60.27 crore shares representing a 6% stake at a floor price of Rs 71 a share would fetch about Rs 4,200 crore to the exchequer.

Market Impact and Disinvestment Proceeds

• The sale of over 60.27 crore shares in NHPC would mark the third OFS of a public sector company in the current fiscal year.
• Last week, the government sold a 2% stake in Coal India via OFS to mop up Rs 5,542 crore.
• In May, it sold 8.08% in the Central Bank of India to raise Rs 2,266 crore.

Together, the disinvestment proceeds so far in FY27 stand at Rs 7,808 crore, exceeding the Revised Estimates for FY26.

Key Takeaways

• The Indian government aims to raise Rs 80,000 crore through disinvestment and asset monetisation in FY27, more than double the Rs 33,837 crore given in the Revised Estimates for FY26.
• The sale of NHPC shares at Rs 71 per share would fetch about Rs 4,200 crore to the exchequer.
• The OFS will open for non-retail investors on June 2, and for retail investors on June 3.

FAQs

What is the floor price of NHPC shares in the OFS?

The floor price of NHPC shares in the OFS is Rs 71 per share.

How much will the government raise from the sale of NHPC shares?

The sale of over 60.27 crore shares in NHPC would fetch about Rs 4,200 crore to the exchequer.

What is the timeline for the OFS?

The OFS will open for non-retail investors on June 2, and for retail investors on June 3.

Conclusion

The Indian government’s decision to sell up to 6% stake in NHPC through an OFS at a floor price of Rs 71 per share marks a significant step towards achieving its disinvestment targets in FY27. As the market continues to be volatile, investors are advised to keep a close eye on the developments and make informed decisions accordingly. With the government aiming to raise Rs 80,000 crore through disinvestment and asset monetisation, the coming months are expected to be crucial for the Indian economy.