The government will kick-start its disinvestment process for the current fiscal with 11.36 percent stake sale in state-controlled hydropower producer NHPC at Rs 21.75 per share through an offer for sale (OFS) that is likely to fetch the exchequer over Rs 2,700 crore. The issue price of Rs 21.75 per share is at a discount of 5.6 per cent to NHPC's closing price of Rs 23.05 on April 26 on the BSE. The government holds 85.96 per cent in NHPC and selling of over 125 crore shares or 11.36 per cent stake would help it comply with the minimum public shareholding norm.
According to the revised OFS rules, non-retail investors could bid for NHPC shares on April 27 while retail investors will be eligible to bid on April 28. A minimum of 20 per cent of the shares on offer have been reserved for allocation to retail investors and retail investors will be allocated shares at a discount of 5 per cent to the cut-off price. Besides, a minimum of 25 per cent of the offer size has been reserved for mutual funds and insurance companies. No single bidder other than mutual funds and insurance companies shall be allocated more than 25 per cent of the offer size.
NHPC will be the first share sale of Department of Investment and Public Asset Management (DIPAM), earlier called Department of Disinvestment, this fiscal. Budget for 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.
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