NHPC likely to float the biggest power sector IPO in Jul-Aug

Having missed the opportunity last year to hit the market, power sector giant NHPC is likely to approach the Securities and Exchange Board of India (Sebi) by May for its Initial Public Offer (IPO).

"We are waiting for the appointment of independent directors... We hope to have them on the Board soon as the names have already been forwarded and are under process. The government has extended all support," NHPC Chairman and Managing Director S K Garg told PTI.

"We should be hitting the market around July-August this year and submit revised draft prospectus to Sebi, based on current fiscal's financial performance on March 31," he added.

NHPC, which has a paid up capital of Rs 11,500 crore, is likely to come out with a public offer of 167 crore shares, which would add 10 per cent as fresh equity, besides five per cent disinvestment. The shares would have a face value of Rs 10 each.

The proceeds from the IPO would be used to part finance NHPC's Rs 28,000 crore expansion plan. NHPC has set an ambitious target of becoming a 10,000 MW power generation company during the 11th plan period.

This will be the biggest IPO in the power sector with 167 crore shares on sale, officials said. (So far, Reliance Power IPO, which raised Rs 11,563.2 crore, is considered the biggest in power sector. Taking this figure into account, an issue price of around Rs 70 will make NHPC IPO the biggest.)

Asked about the premium the company was expecting, Garg declined to comment, saying it was too early to comment.

However, he was confident that investors had faith in PSUs as it happened in case of the Rural Electrification Corporation (REC), whose IPO was subscribed over 30 times despite uncertainty in the stock market.