Govt to sell 11.36% equity in NHPC, raise around Rs2,700 crore

The government will sell 11.36 per cent equity in National Hydro Power Corporation (NHPC), to raise around Rs2,700 crore, in the first disinvestment of the current financial year (2016-17).

The government announced on Tuesday that it will sell 11.36 per cent equity shares in electricity generator NHPC Ltd at Rs21.75 apiece.

NHPC will offer for sale 1257.6 million shares at an issue price of Rs21.75 a share, which is a discount of 5.6 per cent to NHPC's closing price of Rs23.05 on the Bombay Stock Exchange (BSE).

The stake sale will be through the offer for sale mechanism. Non-retail investors can place bids on 27 April while retail investors will be allowed to place bids on 28 April.

A minimum of 20 per cent of the shares on offer or about 254 million shares are reserved for allocation to retail investors. Retail investors will also eligible for a discount of 5 per cent to the cut-off price.

Retail investors mean an individual investor who places bids for shares of total value of not more than Rs2 lakh.

A minimum of 25 per cent of the offer size has also been reserved for mutual funds and insurance companies.

This leaves around 55 per cent of the share offer for major investors.

Shares of public sector hydro power producer NHPC closed 1.32 per cent higher on the BSE at Rs23.05 on Tuesday.

The government currently holds 85.96 per cent stake in NHPC. Post sale this stake will be reduced to 74.60 per cent

For the full fiscal, the government aims to raise Rs35,000 crore from sale of minority stakes in public sector enterprises.

In another development, the department of divestment has sought proposals to appoint merchant bankers for conducting a 10 per cent stake sale in oil and gas explorer Oil India Ltd.

DIPAM has requested interested merchant bankers to submit their proposals latest by 18 May.

On Tuesday, Oil India's shares closed 0.54 per cent higher on the BSE at Rs318.60. At that price, sale of a 10 per cent stake in Oil India will fetch the government around Rs1,915 crore.