nhpc ltd (NHPC) Snapshot

The government is seeking to fetch around INR 25 billion from the stake sale of NHPC Ltd. (BSE:533098) and National Fertilizers Ltd. (BSE:523630), It plans to to divest 7.64% stake or over 37.4 million of National Fertilizers through the offer-for-sale (OFS) route and 11.36% stake in NHPC. The department of disinvestment has invited expressions of interest from merchant bankers to be lead managers and assist and advise the government. At the current market price of INR 46 a share NFL stake sale could fetch the government around INR 1.72 billion the sale of over 120 crore shares of NHPC through an offer for sale at INR 20 per share could fetch around Rs INR 24 billion. At present, the government holds a 97.64% stake in NFL and 86.36% in NHPC.

Government invited bids from merchant bankers to advise it on the sale of its 11.36% stake in NHPC Ltd. (BSE:533098) through offer for sale route (OFS), advertisement in business dailies said. "Proposals are invited, by 1700 IST on June 19, from reputed merchant bankers, either singly or as a consortium, with experience and expertise in public offerings/OFS in capital markets, to act as merchant bankers/selling brokers and to assist and advise the government in the process," it said. Government currently holds 86.36% stake in NHPC. At the current market price, the government will raise about INR 26.5 billion from divesting 11.36% stake in the company. An inter-ministerial panel had met on May 20, 2013 to consider an 11.36% stake sale in NHPC, wherein the officials in the Department of Disinvestment and power ministry approved share sale in the company. After the approval by the ministerial panel, the disinvestment department has floated request for proposal for appointment of merchant bankers and legal advisors. Shares of NHPC Ltd were traded at INR 19.95 rupees on the National Stock Exchange, up 1% from the previous close. The government of India aims raise about INR 30 billion, according to a senior power ministry official. Revenue from sale will be used to lower India's budget deficit to 4.8% of gross domestic product in the current fiscal year from 5.2% in 2012. The official said, "The time line for the [NHPC] share sale will depend on market conditions." The official added that the power ministry is seeking to get the approval from Cabinet Committee on Economic Affairs for the deal.

NHPC Ltd. announced that the Board of Directors of the company at its meeting held on May 28, 2013, has recommended a final dividend of 6% or INR 0.60 per equity share on the paid up share capital of the company, for the financial year 2012-13. Final dividend, if approved and declared in the Annual General Meeting, shall be paid/dispatched within the period as stipulated in Companies Act, 1956.