The Indian government has unveiled its plan to divest a 2.5% stake in the National Hydroelectric Power Corporation (NHPC) through an Offer for Sale (OFS). With a floor price set at Rs 66 per share and an option to sell an additional 2.5% stake in case of oversubscription, the NHPC OFS presents a compelling investment opportunity.
NHPC, a prominent public sector undertaking, is renowned for operating and maintaining hydroelectric power plants across India, boasting a substantial total installed capacity of 7,071 MW, making it one of the nation’s largest hydroelectric power producers.
Scheduled to transpire on January 18 and 19, 2024, the OFS is a pivotal component of the government’s broader divestment program, designed to procure funds by selling stakes in public sector entities. Notably, NHPC’s shares closed at Rs 73.00 on the Stock Exchange . The floor price of Rs 66 per share presents a substantial discount of approximately 10% over the current market price, a move anticipated to elicit robust demand from investors.
The financial prowess of NHPC further augments investor interest. With a commendable track record of profitability, the company reported a net profit of Rs 4,239 crore in the financial year 2022-23. Moreover, NHPC has consistently rewarded its shareholders through regular dividend payouts over the past several years.
The government’s strategic move to divest a stake in NHPC via an OFS is poised to capture considerable investor attention. NHPC, backed by its robust financial performance and commitment to shareholder returns, stands as an attractive investment opportunity. This divestment aligns with the government’s broader agenda of raising funds through the sale of stakes in public sector entities, contributing to the ongoing economic trajectory.