According to the official, the company’s board of directors will recommend the price band for the proposed public offer, IPO, at a meeting slated for September 16, and will seek the approval of Empowered Group of Ministers’ for price fixation within the next two days. A weeklong investor road show in cities within the country and abroad is planned from September 29.
NHPC Chairman SK Garg could not be reached for comments despite repeated attempts. The company filed its offer document with the capital markets regulator, Securities and Exchange Board of India (SEBI) earlier on August 6.
NHPC plans to issue 167 crore equity shares of Rs 10 each. This would result in the dilution of 15 per cent of the government’s holding in the hydroelectric power major.
Currently, the government owns 100 per cent of the company. NHPC has a paid-up capital of Rs 11,500 crore, comprising of 1,150 crore equity shares of Rs 10 each.
Analysts tracking the sector sounded bullish on the proposed IPO. “It is a highly rated public sector undertaking and will enthuse investor interest in the primary market,” said Amitabh Chakraborty, president (equity), Religare Enterprises. “The IPO is expected attract long-term foreign institutional investors along with retail participants and will bring in depth into the market.
” The public offer was delayed for want of the stipulated number of independent directors on the company’s board. SEBI’s listing norms stipulate that half the board of a listed company should comprise independent directors.
NHPC’s net profit during 2007-08 stood at Rs.1,004 crore-up from the previous year’s Rs.
925 crore. It has an installed capacity of 5,200 MW generated from 13 of its hydro power plants and plans to increase its generation capacity to 11,000 MW by 2012 from 5,200 MW now.
The company plans to invest Rs 90,000 crore in new projects over the next ten years. About 10 hydroelectric power plants of the company are under various stages of implementation, including the country’s largest hydroelectric project — a 2,000 MW plant at Subansiri in Arunachal Pradesh.