NHPC shortlists 5 merchant banks for IPO

National Hydroelectric Power Corporation (NHPC), the central power utility, has shortlisted five merchant banks for its initial public offering (IPO) likely to hit the market in first quarter of FY08.

Sources close to the development informed that the merchant banks shortlisted are "� SBI Capital Markets, ICICI Securities, HSBC Securities, Kotak Securities and Enam. NHPC is likely to select two of these five in the next few weeks. NHPC got the Cabinet nod for capital restructuring in the first week of December.

NHPC has a paid-up share capital of Rs 10,349 crore, while its authorised capital is pegged at Rs 15,000 crore. The cabinet committee of economic affairs (CCEA) had approved fresh share issues by Rural Electrification Corporation, Power Finance Corporation and Power Grid Corporation of India in 2006 along with NHPC.

R S Meena, executive director (R-3) of NHPC, said it has already initiated discussion with merchant bankers.

"The issue is likely to come by April-June end. The merchant banker will be appointed in the next few weeks," he said. Meena indicated that NHPC is likely to raise between Rs 1,000 crore and Rs 1,500 crore.

"Everything will be finalised soon," he added.

Meena informed that the power utility is likely to offer 10-15 per cent of its paid up equity through the IPO.

"We have got the nod to offer up to 24 per cent through the IPO. But we are likely to offer 10-15 per cent. We feel it will be enough to raise the targeted amount," he added.

According to him, the fund raised through IPO would help the company to meet the 11th Plan target. The hydel power utility is planning to add 5,712 mw in the next five years during the 11th Plan.

The company currently has an installed capacity of 3,755 mw. It requires an investment of close to Rs 30,000 crore. NHPC currently has a turnover of close to Rs 1,600 crore.

According to Meena, the company is targeting Rs 1,800 crore turnover in 2006-07.