NHPC gets ready for IPO debut

NHPC is all set to mop up about Rs 577 crore through its maiden public offer, the largest ever float in terms of shares offered by any government power company.

Sources said the company will hit the capital market with 16.7 crore equity shares with a price band of Rs 30-Rs 34 on August 7, a day before the one-year deadline expires as per the draft red herring prospectus filed with Sebi.

NHPC filed a revised draft prospectus on August 6 last year. NHPC, the country’s largest hydropower generator, will raise Rs 501 crore at the lower end of price band. Empowered ministerial group headed by the finance minister, Mr Pranab Mukherjee, met on Friday to finalise the price band.A final go-ahead to the initial public offer (IPO) with price band from the finance ministry was expected on Saturday kicking off the NHPC campaign for getting listed on bourses.

The final red herring prospectus with price band would be simultaneously filed with Sebi and the registrar of companies during the week-end, officials in the power ministry said.

The power secretary, Mr H.S. Brahma, refused to comment on the price band but said the company would start road shows, first in Indian cities and then overseas, by mid next week.

NHPC is the first in a series of public sector companies that have been lined up by the government for disinvestment. The IPO would constitute 10 per cent fresh issue and five per cent equity divestment by the union government. Post-issue, the government’s stake in the company would decline to 86.3 per cent.

Oil India and Rites Ltd have also filed draft prospectus with Sebi.

Among others Satluj Jal Vidyut Nigam Ltd and North Eastern Electric Power Corporation Ltd are also believed to be on the divestment list.

NHPC will also be the first of the PSU companies to break the 16-month long dry spell on the capital markets. Rural Electrification Corporation was the last public sector power company to come out with a maiden offer in February last year. The company has approa-ched the government for a follow-on offer to mobilise Rs 3,000 crore through equity funds.

The price band of NHPC is lower than that of REC. However, the band is closer to those fixed by Power Finance Corporation (PFC) and Power Grid Corporation India Ltd (PGCIL), which went public in 2007.

PGCIL launched its issue in August 2007 at a price band of Rs 44-52 a share, while PFC decided to offer shares in the range of Rs 73-85 a piece.

NHPC first filed the draft papers for the issue in August 2007. Initially, the IPO got stuck for want of required number of independent directors on the co-mpany’s board. The second delay was owing to poor market conditions.

The company has earmarked an investment of Rs 28,000 crore in the eleventh five-year Plan to become an over 10,000-mw company from the present 5,200-mw. The proceeds will be partly utilised to finance expansion.

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