India to Sell 6% Stake in NHPC via Offer for Sale, Fetching ₹4,200 Crore

The Indian government has announced plans to sell up to 6% stake in NHPC, a leading power generation company, through an offer for sale (OFS) starting on Tuesday. The move is part of the government’s efforts to raise funds through disinvestment and asset monetization.

Government to Sell Stake in NHPC via Offer for Sale

The OFS will begin on June 2 for non-retail investors and on June 3 for retail investors. The sale of up to 6% stake in NHPC, representing over 60.27 crore shares, is expected to fetch around ₹4,200 crore to the exchequer.

The floor price of ₹71 per share is at an 8% discount over Monday’s closing price of ₹77.19 on the BSE. Shares of NHPC closed down 2.07% over the previous close.

Key Details of the Offer for Sale

The OFS will have a base offer of 3% of NHPC’s equity and an additional 3% Green Shoe Option in case of oversubscription. The floor price has been fixed at ₹71 per share.

Market Impact and Details

• The sale of over 60.27 crore shares representing a 6% stake in NHPC at a floor price of ₹71 a share would fetch about ₹4,200 crore to the exchequer.
• This will be 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 ₹5,542 crore.
• In May, it sold 8.08% in the Central Bank of India to raise ₹2,266 crore.
• Together, the disinvestment proceeds so far in FY27 stand at ₹7,808 crore.
• The FY27 Budget has estimated a mop-up of ₹80,000 crore through disinvestment and asset monetization, more than double the ₹33,837 crore given in the Revised Estimates for FY26.

Key Takeaways

• The Indian government is selling up to 6% stake in NHPC through an offer for sale.
• The sale is expected to fetch around ₹4,200 crore to the exchequer.
• This is the third OFS of a public sector company in the current fiscal year.

FAQs

What is the floor price for the sale of NHPC shares?

The floor price for the sale of NHPC shares has been fixed at ₹71 per share.

When will the OFS open for non-retail investors?

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

What is the expected disinvestment proceeds for FY27?

The FY27 Budget has estimated a mop-up of ₹80,000 crore through disinvestment and asset monetization.

Conclusion

The sale of up to 6% stake in NHPC is a significant move by the Indian government to raise funds through disinvestment and asset monetization. The expected disinvestment proceeds for FY27 stand at ₹80,000 crore, more than double the Revised Estimates for FY26. Investors can look forward to the OFS, which is expected to fetch around ₹4,200 crore to the exchequer.