The government considered setting a higher price for the initial share sale offer of Satluj Jal Vidyut Nigam, but settled for a lower Rs 23-26 band considering the current market conditions, Power Minister Sushilkumar Shinde said today.
"We thought that the price should be Rs 30 (per share) but considering the market we decided it should be Rs 23," Power Minister Sushilkumar Shinde said here during a conference.
Institutional investors were reported to be willing to pay between Rs 27 and 30 per share and a lower price band came as a surprise for many.
The government, which is selling 10 per cent of its equity shares in the hydro-power generating company through an initial public offering (IPO), fixed a price band of Rs 23-26 per share.
The issue opens tomorrow. A discount of five per cent per share will be given to retail investors as well as SJVNL employees.
The price range for SJVNL was fixed by an empowered group of ministers (EGOM) chaired by Finance Minister Pranab Mukherjee.
This will be the first disinvestment of the government this fiscal.
The company received an approval from the Cabinet in October last year for 10 per cent disinvestment of the government's stake in SJVNL.
The IPO was originally scheduled to hit markets last fiscal, but was put off after tepid response to its disinvestment in NTPC and REC.
SJVNL is a joint venture between the Centre and Himachal Pradesh.
The current power generation capacity of the company stands at 1,500 MW and it plans to augment its capacity by about 1,200 MW by the end of the ongoing 11th Five-Year Plan.