NHPC Government to sell 3.5% of NHPC through OFS; ₹66 per share is the floor price

NHPC OFS: On January 18 and 19, the government will conduct an offer-for-sale to sell 3.5 percent of NHPC.

The government plans to sell 251,125,870 shares, representing a 2.5 per cent stake in NHPC and has set the floor price at ₹66 a share.

NHPC OFS: Through an offer-for-sale (OFS) on January 18 and 19, 2024, the government has proposed to purchase a 3.5% share in NHPC Ltd., a prominent player in the renewable energy industry. The OFS offers a one percent green shoe option in addition to a standard size of 2.5 percent. On January 18 for non-retail investors and January 19 for retail investors, the OFS will open.

In a post on "X," the Secretary of the Ministry of Finance's Department of Investment and Public Asset Management (DIPAM) stated, "Offer for sale in NHPC opens tomorrow for non-retail investors." It's Friday for retail investors to bid. The government plans to sell off 3.5% of its equity, with a 1% green shoe option included. 

Approximately ten percent of the shares under offer will be set aside for distribution. "In a regulatory filing to the stock exchanges, NHPC stated that "retail investors shall imply an individual investor who submits bids for offer shares of total value of not more than ₹2 lakhs aggregated across stock markets."

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The government plans to sell an extra 100,450,348 shares, or 1% of the company's total paid-up capital, in the event of an oversubscription. "NHPC stated in its exchange filing that the allocation will take place at or above the floor price on a price priority basis at multiple clearing prices, as per the SEBI OFS circular. However, retail investors will have the option to bid at or above the cut-off price."

With a green shoe option to sell an additional 10 crore equity shares in NHPC, the government would sell around 25 crore shares as part of the OFS. The ₹66 floor price per share represents a 9.66% discount to the closing price of NHPC shares on Wednesday. The OFS would bring in roughly ₹2,300 crore for the government at the floor price.

NHPC's shares ended the day on the BSE 0.90 percent higher at ₹73.06 a share.