Government starts NHPC stake sale process; to fetch Rs 2,400 crore

NEW DELHI: The Finance Ministry has initiated the process of 11.36 per cent stake sale in NHPC and will soon appoint merchant bankers for the disinvestment, which may fetch around Rs 2,400 crore to the exchequer.


The Department of Disinvestment (DoD) has invited expression of interest from merchant bankers with experience in public offerings/OFS to act as book running lead managers and to assist and advise government in the process.

The government plans to disinvest 11.36 per cent stake, or over 120 crore shares of NHPC through Offer For Sale ( OFS) in the domestic market.

At the current market price of Rs 20 apiece, the 11.36 per cent stake sale could fetch around Rs 2,400 crore to the exchequer.

Up to 10 per cent of the OFS would be reserved for the employees of the company and shares would be offered to them at a discount of 5 per cent over the issue price.

Government currently holds 86.36 per cent stake in NHPC. The hydro-power company got listed on bourses in 2009 after the promoter divested 5 per cent stake while company issued 10 per cent fresh equity.

The paid-up equity capital of the company, as on March 31, 2012 was Rs 12,300.74 crore.

The government uses the OFS route, popularly known as auction method, to divest its stake in PSUs that come in top 100 companies as per market capitalisation. It has already used the route to sell stake in Oil India, NTPC, NMDC and Hindustan Copper in last fiscal.

The government proposes to raise Rs 40,000 crore by way of disinvestment in the current fiscal. It has already lined up a host of companies, including Coal India, Indian Oil and Hindustan Aeronautics, for stake sale.

Although two months of the fiscal are about to get over, the government is yet to start its disinvestment programme.

In the last fiscal (2012-13), the government has raised Rs 23,920 crore through disinvestment.