Welkin News

In a strategic move to bolster its fiscal position, the Indian government has kicked off the sale of a 3.5% stake in NHPC Limited, the state-owned hydropower giant. This significant divestment, unveiled on January 17th, employs the offer-for-sale (OFS) method and is poised to inject approximately ₹23.2 billion (US$279.04 million) into government reserves

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Offer Size: The government plans to divest 2.5% with an additional greenshoe option of 1%, aggregating to a 3.5% stake in NHPC’s equity.

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Bidding Process: Institutional investors have the opportunity to participate on January 18th, while retail investors can engage on January 19th.

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Implications for NHPC and the Power Sector

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Transparency and Governance: Increased public scrutiny may incentivize NHPC to enhance operational efficiency and transparency, fostering improved governance

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Boost for Renewable Energy: NHPC’s focus on hydropower aligns with India’s renewable energy goals, and the divestment proceeds could propel further initiatives in clean energy.

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Welkin News

NHPC-Government Initiates 2.5% Stake Sale via OFS at Rs 66/Share

Offer Size: The government plans to divest 2.5% with an additional greenshoe option of 1%, aggregating to a 3.5% stake in NHPC’s equity.

Floor Price: A competitive ₹66 per share has been set, marking a nearly 10% discount from its closing price on January 17th.

Bidding Process: Institutional investors have the opportunity to participate on January 18th, while retail investors can engage on January 19th.

Expected Proceeds: Anticipated proceeds of ₹23.2 billion will contribute to the government’s disinvestment target of ₹510 billion for the current fiscal year.

Implications for NHPC and the Power Sector

Transparency and Governance: Increased public scrutiny may incentivize NHPC to enhance operational efficiency and transparency, fostering improved governance

Market Participation: The stake sale promises to broaden NHPC’s shareholder base, fostering diverse perspectives and capital infusion.

Boost for Renewable Energy: NHPC’s focus on hydropower aligns with India’s renewable energy goals, and the divestment proceeds could propel further initiatives in clean energy.

Impact on Stock Price: While short-term volatility may surround the OFS, the long-term trajectory hinges on investor sentiment and NHPC’s future performance.

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