Government to offload 3.5% stake in NHPC: Grab a piece at Rs 66 per share

In a move towards promoting sustainable energy, the Indian government has set the stage for a significant stake sale in the renowned renewable energy giant, NHPC Ltd. Let’s break down the key details of this offer-for-sale (OFS) that could reshape the energy landscape.

Government’s Green Move: The government is eyeing a 3.5% stake in NHPC through the OFS, scheduled for January 18 and 19, 2024. This includes a base size of 2.5% and an additional 1% as a green shoe option. The OFS opens today for non-retail investors and tomorrow for retail enthusiasts.

Size Matters: Around 10% of the offered shares are reserved for allocation. Notably, retail investors are those bidding for shares with a total value of not more than Rs 2 lakh across stock exchanges.

Oversubscription Alert: In the event of oversubscription, the government is prepared to sell an additional 100,450,348 shares, equivalent to 1% of NHPC’s total paid-up capital.

Bidding Strategy: NHPC outlines that allocation will be based on price priority for non-retail investors. However, retail investors have the option to bid at or above the cut-off price.

Numbers in Play: The OFS involves the sale of over 25 crore equity shares in NHPC, with a green shoe option for an additional 10 crores. The floor price is set at Rs 66 per share, offering a 9.66% discount over Wednesday’s closing price. At this rate, the OFS could potentially contribute around Rs 2,300 crore to the government’s coffers.

Market Mood: Today, NHPC opened at Rs 69 and is currently trading at Rs 69.6, reflecting a -4.66% change from the previous close.

Insights: This strategic move not only aims at boosting the government’s financial health but also aligns with the broader goal of promoting renewable energy. NHPC’s role in the renewable sector becomes even more crucial as it contributes to India’s clean energy aspirations.

Green Investment Potential: Investors, both retail and non-retail, have an opportunity to be part of this green revolution. With a focus on sustainability, NHPC could be a game-changer in the renewable energy landscape.

Closing Thoughts: As the government sets the wheels in motion for the NHPC stake sale, it’s not just about financial gains but also about steering the country towards a greener and more sustainable future. Investors, buckle up for a ride into the future of renewable energy!

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.