State-run hydropower company NHPC Ltd’s share sale was oversubscribed within hours of opening on Wednesday, as the government began its disinvestment programme for the current financial year.
The government is selling 125.76 crore shares, or 11.36% of NHPC, to raise about Rs 2,750 crore ($410 million). About 100.61 crore shares have been earmarked for institutional investors and the remaining for retail investors.
The institutional investors’ portion received bids for 1.56 times the shares on offer, according to stock-exchange data. Retail investors will bid on Thursday.
The floor price for the sale has been fixed at Rs 21.75 apiece. Shares of NHPC fell 6.5% to Rs 21.55 apiece on Wednesday in a Mumbai market that gained 0.2%.
The NHPC share sale will also help the government meet the minimum public shareholding norm of 75% in a listed company; it currently holds about 86% of the power producer.
The sale is part of a plan to raise Rs 56,500 crore from disinvestment in the financial year that began on April 1. The government has failed to meet its disinvestment targets in the previous six years.
Edelweiss Securities Ltd, HSBC Securities and Capital Markets (India) Pvt Ltd and IDFC Securities Ltd are lead managers to the issue.