Shares of NHPC plunged as much as 6.72 per cent on Wednesday after the government announced that it will sell 11.36 per cent equity shares in electricity generator at Rs 21.75 apiece to raise about Rs 2,700 crore. The proposed floor price is at a discount of 5.6 per cent to NHPC’s closing price of Rs 23.05 on Tuesday.
The sale of 125.76 crore shares will happen over two days, April 27 for non-retail investors and on April 28 for retail investors, according to Notice for Offer of Sale.
At 9.45 am, shares of NHPC were trading 5.86 per cent down at Rs 21.70. The scrip opened at Rs 21.80 and has touched a high and low of Rs 21.80 and Rs 21.50, respectively, in trade so far. Sensex was marginally down 9.89 points, or 0.04 per cent, at 25,997.41.
A minimum of 20 per cent of the shares on offer have been reserved for allocation to retail investors. Retail investors will be allocated shares at a discount of 5 per cent to the cut-off price. Retail investors mean an individual investor who places bids for shares of total value of not more than Rs 2 lakh.
Angel Broking in a research note said, “At the OFS price of Rs 21.75 per share, the stock is available at a P/B multiple of 0.75x FY2016E and 0.71x FY2017E adjusted BV. Considering NHPC’s strong expansion plans and execution track record, the valuation appears reasonable with respect to peers. However, with the overhang on the stock due to the uncertainty in the Subansiri project, we remain ‘Neutral’ on this OFS.”
Non-retail investors shall have an option to carry forward their bids from T-day (April 27) to T-1 day (April 28). Non-Retail investors choosing to carry forward their bids to T+1 day are required to indicate their willingness to carry forward their bids. Edelweiss Securities, HSBC Securities and Capital Markets (India) and IDFC Securities Ltd are lead manager of the issue.
Budget 2016-17 has set a disinvestment target of Rs 56,500 crore. Of this, Rs 36,000 crore is estimated to come from minority stake sale in PSUs and the remaining Rs 20,500 crore is projected to come from strategic sale in both profit and loss-making companies.
For current fiscal, Finance Ministry has drawn up a list of 16 PSUs including ONGC, Oil India and Coal India for disinvestment, which at current prices could fetch the exchequer Rs 40,000 crore. The list includes state-owned companies such as NMDC, MOIL, MMTC, National Fertilisers, NHPC, NALCO and Bharat Electronics.
With agency inputs