The NHPC board will consider a proposal to buy back equity shares at a meeting this week.
“The proposal for buy-back of equity shares is to be considered by the board of directors of the company in its board meeting scheduled to be held on October 24,” State-owned NHPC said in a regulatory filing on Monday to the BSE. It did not provide more details.
The country’s largest hydro power producer will buy back shares worth Rs. 1,600 crore, sources had said in August.
The government had earlier planned to disinvest an 11.36 per cent stake in NHPC through an offer for sale in the domestic market. The share buyback was proposed due to the lower valuation of the company’s shares.
NHPC shares rose 0.53 per cent to close at Rs. 18.90 on the BSE. The shares are down about 36 per cent from a 52-week high of Rs. 29.40 on February 20.
The government currently holds an 86.36 per cent stake in the hydroelectric power generator.
After board approval for the proposal, the Power Ministry will approach the Cabinet for the final nod.
NHPC was listed on the bourses in 2009 after the government divested a 5 per cent stake and the company issued 10 per cent of fresh equity.
The government plans to raise Rs. 40,000 crore in the current financial year (2013-14) through disinvestment.
NHPC generates 5,702 MW of electricity from 17 hydel stations in the country. As many as seven power stations totalling 4,095 MW of capacity are under construction.