The flood of money in the power sector continues. After a blockbuster issue of Adani Power(which raised Rs 3,000 crore), government owned hydro power firm NHPC received bids worth Rs 21,400 crore($4.45 billion) on first day of the IPO.
The issue, which was fully subscribed within the first hour of opening, was ‘oversubscribed’ over 2.5 times by the close of bidding on day 1 and overall 3.5 times.
The institutional investors carried the day for NHPC with QIB portion being subscribed 6 times on the first day. Interestingly, the investor profile was heavily tilted towards domestic banks and insurance firms who accounted for almost 90% of the total bids made during the first day.
The first day did not see any major participation from HNIs and other retail and corporate investors. This was despite attractive pricing of the issue in the range of Rs 30-36/share. At the upper end of the price band the government will be able to raise Rs 6,038 crore through the issue, making it the second largest IPO in the country since the over $2 billion offering of Reliance Power in January’08.
The issue which comprises a mix of fresh issue and government shares for sale (as part of plans to garner funds to bridge fiscal deficit) has Enam Securities, Kotak Mahindra Capital and SBI Capital Markets as its book running lead managers.
The government is looking to sell as much as 55.9 crore shares besides the company making the fresh issue. It would garner close to Rs 2,012 crore or about one third of total issue proceeds. The remaining Rs 4,000 crore would then go into the company for expansion requirements.