<article>The government will sell an 11.36% stake in state-owned hydropower producer NHPC Ltd through a two-day offer for sale (OFS) that begins on Wednesday.</article>

The government will sell an 11.36% stake in state-owned hydropower producer NHPC Ltd through a two-day offer for sale (OFS) that begins on Wednesday.
The centre has set a floor price of Rs.21.75 per share for the sale that will help the government raise a little more than Rs.2,700 crore, NHPC said in a stock exchange filing on Tuesday.
The floor price is at a 5.63% discount to Tuesday’s closing price.
Retail investors will get an additional 5% discount on their respective bids.
Shares of NHPC advanced 1.32% to Rs.23.05 on BSE on Tuesday. The stock has touched a high of Rs.24.40 and a low of Rs.15.55 in the past 52 weeks, according to exchange data.
NHPC’s offer, comprising 1.25 billion shares, is the first disinvestment for fiscal 2017.
If the offer is successful, the government’s stake in NHPC will drop to 74.6% and make it compliant with the Securities and Exchange Board of India’s (Sebi) minimum public shareholding (MPS) norms.
The government held an 85.96% stake in NHPC at the end of 31 March, according to stock exchange data.
In October 2014, Sebi mandated all public sector undertakings (PSUs), excluding public sector banks (PSBs), to raise public shareholding to a minimum 25% by 21 August 2017.
The notification was introduced with a view to promote a wider investor base in state-run companies and also provide a boost to the government’s plan to raise funds through its disinvestment programme.
Previously, publicly traded state-run companies were required to have at least 10% public holding.
Sebi, in June 2010, had asked publicly traded non-PSUs to attain a minimum 25% public shareholding within three years.
Currently, 21 publicly traded state-run companies, including NHPC, have promoter holding more than 75%, according to data compiled by Capitaline, a corporate database provider.
The government will generate Rs.24,000 crore at current stock prices if it were to bring down its stake to 75% in these companies, data showed.
Edelweiss Securities Ltd, HSBC Securities and Capital Markets (India) Pvt. Ltd and IDFC Securities Ltd are managing the NHPC stake sale.
On Tuesday, the government also floated proposals for a 10% stake sale in state-run oil explorer Oil India Ltd.
The government is seeking to hire investment bankers and financial advisers on 18 May, according to the Department of Disinvestment (DoD) website.
The government has also hired bankers for divestment in Coal India Ltd but is yet to announce its launch.
In January, the government invited investment bankers to bid for handling the initial public offering of Cochin Shipyard Ltd.
The Union government aims to raise Rs.56,500 crore by selling stakes in state-owned enterprises in 2016-17, out of which Rs.36,000 crore will come from minority stake sales and Rs.20,500 crore from strategic stake sales. This is 19% lower than last year’s target.
For FY16, the government had set a record target of raisingRs.69,500 crore through disinvestment, comprising Rs.41,000 crore by way of minority stake sale and an additionalRs.28,500 crore from strategic sales.
The ministry later trimmed its target by roughly 57% toRs.30,000 core, citing volatile market conditions. However, the amount garnered was even lower.
This article was first published on <a href="http://www.livemint.com">Livemint.com</a>

The government will sell an 11.36% stake in state-owned hydropower producer NHPC Ltd through a two-day offer for sale (OFS) that begins on Wednesday.

India to raise $406m from stake sale in state-owned hydel power unit NHPC

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India to raise $406m from stake sale in state-owned hydel power unit NHPC

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