NHPC: first disinvestment of UPA to take off on 7 August

NHPC: first disinvestment of UPA to take off on 7 August
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First Published: Tue, Jul 28 2009. 04 57 PM IST
Updated: Tue, Jul 28 2009. 04 57 PM IST
New Delhi: Free from political shackles, the government’s divestment programme is all set to take off as power utility NHPC on Tuesday announced sale of equity from 7 August at a price of Rs30-36 to raise up to Rs6,048 crore.
“We have decided a price band of Rs30-36 for the IPO,” NHPC chairman and managing director S K Garg said on Tuesdaty about the initial public offer that will close on 11 August.
This is the first stake sale by a state-run company in 17 months after REC went public in February 2008 to raise over Rs1,600 crore.
In its last tenure, the Manmohan Singh government had put on hold disinvestment in state-owned undertakings in the face of opposition from allies like the DMK and the Left parties.
The absence of a detailed disinvestment programme in the union budget for 2009-10 had disappointed the market which shed nearly 900 points in trading on that day and the NHPC issue, to be followed that of Oil India Ltd in September, is being keenly looked-forward to.
The sale of 5% government equity, along with issuance of fresh shares totalling 10%, at the top end of the price band could fetch Rs6,048 crore. Post-issue, the government equity would come down to 86.36% in the company that could have a valuation of Rs44,000 crore.
NHPC, among the top ten companies in terms of investment, would sell 168 crore shares. The funds raised from the IPO would be used for the company’s brownfield expansion plans.
The government would get one-third of the IPO proceeds (around Rs2,000 crore) and two-thirds (around Rs4,000 crore) will go to the company.
In the Budget for 2009-10, finance minister Pranab Mukherjee had said, “The PSUs are the wealth of the nation, and part of this wealth should rest in the hands of the people.”
“While retaining at least 51% government equity in our enterprises, I propose to encourage people’s participation in out disinvestment programme,” Mukherjee had said.
The Congress, which heads the UPA, had made clear its intent on going ahead with disinvestment saying if any of its “allies had any specific objection, we will deal with it”.
The previous tenure of UPA saw listing of PFC and PGCIL, besides REC.
NHPC, formerly known as National Hydroelectric Power Corporation, has an installed capacity of 4,815 MW and has 11 projects under construction aggregating to a total capacity of 4,622 MW.
The company was set up in 1975 to plan, promote and develop hydroelectric power, but later expanded its operations to include other sources of energy including geothermal, tidal and wind.
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First Published: Tue, Jul 28 2009. 04 57 PM IST
More Topics: NHPC | Disinvestment | IPOs | Pranab Mukherjee | Power |