NEW DELHI: Kicking off the current fiscal's disinvestment programme, the government today raised Rs 2,700 crore from sale of its 11.36 per cent stake in hydropower producer NHPC after retail portion oversubscribed 1.65 times.
A day after institutional bidders poured in Rs 3,410 crore to seek 1.58 times the shares reserves for them, retail investors bid for over 41.45 crore shares of NHPC as against 25.15 crore reserved for them, according to the stock exchange data.
After considering 5 per cent discount that the government has offered to them, bids by retail investors totaled Rs 856.46 crore, 1.65 times the offer size.
The government is selling over 125.76 crore shares, or 11.36 per cent stake, in NHPC at a floor price of Rs 21.75. Of this, over 100.61 crore shares were offered to institutional investors yesterday.
At the floor price of Rs 21.75, the sale of over 125.76 crore shares fetched Rs 2,700 crore to the exchequer.
A 5 per cent additional discount is being offered to retail investors, who are classified as those bidding for shares worth up to Rs 2 lakh.
However, the NHPC stock slipped below the floor price of Rs 21.75 in a weak market and closed at Rs 21.15 on the BSE.
On day one of the two-day share sale, institutional investors yesterday bid for 156.79 crore shares as against 100.61 crore offered to them.
Most of the bids came at the floor or minimum bid price of Rs 21.75. At this price, subscription of over 156.79 crore shares totaled Rs 3,410 crore.
NHPC is the first disinvestment by the government in the current fiscal, which has set a target of Rs 56,500 crore through selling shares and privatisation of public sector undertakings (PSUs).
The government's share sale will bring down its shareholding in NHPC to 74.6 per cent, from 85.96 per cent.
This will help the company comply with the minimum 25 per cent free-float requirement.
NHPC, under the administrative control of the Power Ministry, generates power through conventional as well as non-conventional sources.