United Progressive Alliance (UPA) government's first big ticket disinvestment in its second tenure is all set to rake in moolah with the government fixing a price of Rs. 36 per share for the allotment of shares in the Initial Public Offer (IPO) of NHPC meant to raise Rs. 6,048 crore.
Out of the total funds raised, one-third would go to the Centre as disinvestment proceeds and the rest would remain with the hydro power utility PSU. Officials in the Power Ministry said it had been decided to allot shares at the upper limit of the price band of Rs. 30-36 a share.
The NHPC IPO, in which investors were asked to bid for shares in the price range of Rs. 30-36 a share, closed on August 12 with a huge over-subscription of more than 23 times. NHPC shares are likely to be listed on the bourses in the first week of September.
The shares on sale during the offer included the government's five per cent equity and 10 per cent of fresh equity issued by the PSU. The government would get Rs. 2,016 crore while NHPC would retain the remaining Rs. 4,032 crore. With this, the government's stake would come down to little over 86 per cent in the power PSU.
With an installed capacity of 4,815 MW, NHPC has 11 projects under construction aggregating to a total capacity of 4,622 MW. The new projects are likely to be commissioned by 2012. NHPC would use the IPO proceeds to part fund its ongoing investments in 11 projects. It also has plans to add 14,000 MW of power by 2020 for which it has either completed survey of projects or was in the process of surveying several others.
With the completion of NHPC s IPO, the disinvestment programme of UPA-II has started on a high note as the IPO was over subscribed 23 times. This would give impetus to the planned stake sale in the Central PSUs by the government. The previous tenure of UPA saw listing of three power sector PSUs -- PFC, PGCIL and REC.
