Govt to select among 10 merchant bankers for NHPC stake sale

The govt plans to sell 11.36% of its stake of NHPC through OFS in the domestic market

The government will tomorrow finalise merchant bankers for managing the disinvestment of hydel power producer NHPC, which is expected to fetch over Rs 2,200 crore to the exchequer.

As many as 10 merchant bankers, including Credit Suisse, ICICI Securities, SBI Cap and HSBC have evinced interest in managing the stake sale.

The bankers are scheduled to make their presentation before the disinvestment department tomorrow.

The government plans to sell 11.36% of its stake, or its 120 crore shares of NHPC through Offer For Sale (OFS) in the domestic market.

At the current market price of Rs 18.65 apiece, the stake sale could fetch around Rs 2,238 crore to the exchequer.

Government currently holds 86.36% stake in NHPC. The hydro-power company got listed on bourses in 2009 after the promoter divested 5% stake while company issued 10% fresh equity.

The paid-up equity capital of the company, as on March 31, 2012 was Rs 12,300.74 crore.

While the disinvestment department is eager to offload shares in NHPC, the Power Ministry has been asking for time citing valuation issues.

Up to 10% of the OFS would be reserved for the employees of the company and shares would be offered to them at a discount of 5% over the issue price.

The government has been using the OFS route, popularly known as auction method, to divest its stake in PSUs that come in top 100 companies as per market capitalisation.

It plans to garner Rs 40,000 crore through disinvestment in the current fiscal.