NHPC share sale: Institutional buyers put in Rs 3,410 crore bids

State-owned hydropower producer NHPC Ltd's share sale Wednesday garnered 1.58 times subscription, totalling Rs 3,410 crore, with most bids coming in from LIC and mutual funds.

New Delhi: State-owned hydropower producer NHPC Ltd's share sale Wednesday garnered 1.58 times subscription, totalling Rs 3,410 crore, with most bids coming in from LIC and mutual funds.

Day one of the two-day share sale, wherein the government is offloading 11.36 percent of equity, saw subscription for 156.79 crore shares as against 100.61 crore offered to institutional investors, according to the stock exchange data.

Most of the bids came at the floor or minimum bid price of Rs 21.75. At this price, subscription of over 156.79 crore shares totaled Rs 3,410 crore.

Investment banking sources said most of the bids came from mutual funds and insurance companies including Life Insurance Corporation (LIC).

The offer for sale (OFS) will open tomorrow for retail subscribers.

NHPC is the first disinvestment by the government of the current fiscal, where it is targeting Rs 56,500 crore through selling shares and privatisation of public sector undertakings (PSUs).

Government is selling over 125.76 crore equity shares of NHPC that will bring down its shareholding in the company from 85.96 percent to 74.6 percent. This will help NHPC comply with the minimum 25 percent free-float requirement.

The remaining, over 25.15 crore shares, will be sold to retail investors tomorrow. They will be allocated shares at 5 percent discount to the cut-off price. These individual investors are to place bids for shares of total value not exceeding Rs 2 lakh.

At a floor price of Rs 21.75, the sale will fetch about Rs 2,700 crore to the exchequer. The floor price was at a discount of 5.6 percent over yesterday's closing price.

In the secondary market, NHPC closed at Rs 21.55, down 6.51 percent over previous day close. In the morning trade, it had lost 6.7 percent to Rs 21.50 a piece.

The government has set an ambitious target of Rs 56,500 crore from disinvestments in current fiscal. Of this, Rs 30,000 crore is to come from PSU stake sale and the remaining Rs 26,500 crore from strategic stake sale.

NHPC, under the administrative control of the Power Ministry, generates power through conventional as well as non-conventional sources.

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