The government plans to sell 3.5% of its stake in NHPC through an Offer for Sale (OFS), leading to a decline in the stock.

Government's 3.5% stake sale NHPC: At approximately 9:26 a.m., NHPC shares saw a decrease of 4.33%, equivalent to Rs 3.16, settling at Rs 69.9 each on the BSE. Concurrently, the company's market capitalization was recorded at Rs 70,214.79 crore.

NHPC Stock Falls by 6% as Two-Day Offer for Sale (OFS) Begins | Image : Linkedin

On January 18th, NHPC, a government-owned power company, experienced a decline of over 4% in its stock during Thursday's trading session. This drop followed the government's announcement of its intention to divest a 2.5% stake through an offer for sale (OFS), with a floor price set at Rs 66 per share.

According to the official filing, "The floor price of the offer shall be Rs 66.00/- (Rupees sixty-six only) per equity share ("floor price")."

By 9:26 a.m., NHPC shares had slipped by 4.33%, equivalent to Rs 3.16, reaching Rs 69.9 each on the Bombay Stock Exchange (BSE). At the same time, the company's market capitalization was reported at Rs 70,214.79 crore.

After the market closed on Wednesday, NHPC announced through an official filing that the government plans to sell a 2.5% stake in the company via an Offer for Sale (OFS). The base size of the OFS is set at 25.1 crore shares. Additionally, there is a provision for a green shoe option allowing the sale of an extra 1% or 100,450,348 shares.

"The Seller proposes to sell 2.5% of the paid-up equity (equivalent to 251,125,870 equity shares) shares held in the company having a face value of Rs 10/- each.... with an option to additionally sell up to 100,450,348 equity shares, i.e., 1.00% of the paid-up equity of the company ("the oversubscription option") (hereinafter referred to as "offer shares")," as stated in the filing.

This disinvestment move through OFS is expected to raise between Rs 2,000 to 3,500 crore. Non-retail investors can participate in the OFS on January 18, while it will be open for retail investors on January 19. It's important to note that the offer cannot be canceled during the bidding period.

How NHPC's Stock Has Performed in the Past: Share Price Trends

Over the past year, NHPC shares have seen an impressive increase of more than 65%, outpacing the Nifty 50, which has risen by just over 17%.