Govt expects to raise Rs 4,200 crore through NHPC buyback

Since NHPC came out with its IPO less than five years back, the company may choose to buy back shares at the IPO price of Rs 36 per share to offer a good exit opportunity to existing shareholders

GN Bureau | October 23, 2013



The investment bankers are expecting the buyback price of National Hydroelectric Power Corp's (NHPC) to be set in the range of Rs 30-36 a share, a hefty premium of 52-80% to the current market price. This could help the government raise at least Rs 4,200 crore.

Investment bankers expect the buyback of shares to be done via the tender offer method, which allows a company to buy back shares at any price subject to a pre-approved ceiling price. Also, the tender offer method is the only way the promoter can participate in the buyback of a company.

Bankers said since NHPC came out with its initial public offer (IPO) less than five years back, the company may choose to buy back shares at the IPO price of Rs 36 per share so as to offer a good exit opportunity to existing shareholders.

Bankers said the company will require shareholders' nod as the buyback exceeds 10% of the total share capital, but is well within the maximum 25% limit that the company can buy back. The government plans to offer 140 crore shares, or 11.36% stake, in the hydel power-generation company.

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