The government will sell 11.36% stake in NHPC through an offer for sale (OFS) on Wednesday to raise about Rs 2,700 crore in an early start to this fiscal year’s Rs 56,500-crore disinvestment programme.
As per the revised OFS rules, non-retail investors could bid for NHPC shares on Wednesday while retail investors would do so on Thursday. The government has fixed the floor price for the NHPC OFS at Rs 21.75/share, giving nearly 6% discount to the stock’s Tuesday closing price of `23.05 on BSE. Currently, the Centre holds 85.96% in the hydro power public sector enterprise (PSEs).
Separately, the rechristened Department of Investment and Public Asset Management (DIPAM) also invited bids from merchant bankers to manage the government’s 10% stake sale in Oil India that could fetch it about Rs 1,900 crore.
Besides Oil India, the government has lined up small stake sales in more than a dozen PSEs, including NMDC, Coal India, Oil and Natural Gas Corporation, Hindustan Aeronautics Ltd and Power Finance Corporation.
Out of the Rs 56,500-crore disinvestment revenue target set for the current fiscal, Rs 36,000 crore is estimated to come from minority stake sales in PSEs, while the remaining Rs 20,500 crore would come from strategic stake sales. As per the strategic disinvestment policy unveiled in February, the NITI Aayog is in the process of identifying PSEs wherein the government would either exit the business or give management control to private sector.
After the Budget in February laid greater stress on efficient management of government investment in CPSEs by addressing issues such as capital restructuring and dividend, the DIPAM oversaw share buybacks by worth Rs 4,500 crore by cash-rich HAL and Bharat Dynamics from the Centre in March.
Thanks to the new approach of the government, DIPAM managed to exceed FY16’s revised disinvestment target of Rs 25,300 crore by `6,849 crore.