The NHPC Offer for Sale
Starting today, the central government is selling a 3.5% stake in NHPC, the company that generates electricity. The minimum price for its shares has been set at Rs. 66. Providing details, the government stated that this move is expected to bring in approximately Rs. 2,300 crores to the government treasury. Tuhin Kant Pandey, Secretary of the Department of Investment and Public Asset Management, shared on the social media platform ‘Ex’ that the sale offer (Offer for Sale) in NHPC will open on Thursday for retail investors, who can place bids until Friday. The government plans to divest 3.5% equity.
There is also a one percent green shoe option, meaning an additional one percent can be offered in case of oversubscription. As part of the Offer for Sale, the government will sell more than 25 crores equity shares in NHPC. Under the “Green Shoe” option, an additional 10 crores shares can be sold.
On Wednesday, the minimum price of Rs. 66 per share is at a 9.66% discount from the closing price of NHPC shares. The government is expected to receive around Rs. 2,300 crores from the sale at the minimum price. NHPC shares closed at Rs. 73.06 per equity, with a 0.90% increase on the Bombay Stock Exchange (BSE).
Shares may become multibaggers
NHPC shares have proven to be profitable for investors even in the volatile market. In the last five days, the company’s shares have provided a six percent gain. Over the past month, investors have gained approximately 5.25%, equivalent to Rs. 3.45 per share. In the last six months, investors have earned a substantial profit of 51.48%. Furthermore, in one year, NHPC shares have yielded a remarkable 64.45% return. However, today, the share prices have experienced a decline, trading at Rs. 69.25, down 5.14% or Rs. 3.75.
The government is offering a discount of approximately 10% on the current market price in the Offer for Sale.
Understanding Offer for Sale (OFS) Shares
Offer for Sale (OFS) is a process adopted by companies in the stock market to sell shares, attracting new investors and raising capital. In this process, a company can sell its shares to shareholders to increase its capital and connect with new investors. This process is distinct from the regular share market, where new shares are directly available for individual shareholders in specific cases. Companies can use various methods to attract new investors through this process, such as newspapers, daily event announcements, and various media. The purpose of Offer for Sale is to maximize capital accumulation and attract new investors, allowing the company to develop its capital and strengthen its financial position.