NHPC IPO likely by September

The company awaits government nod for the issue

State-run NHPC is ready with its initial public offer (IPO) plan and is awaiting government approval, its chairman, S K Garg said Monday, 15 June 2009.

NHPC has already secured regulatory approval - valid until September this year - from the Securities and Exchange Board of India (Sebi) for the proposed IPO.

The government is soon likely to appoint an independent director to the board of NHPC, paving the way for the country's largest hydroelectric generator to come out with an IPO by September 2009.

Sebi's rules require independent directors to make up half the company's board before it can sell shares via IPO. The state-owned company has six and needs one more independent director.

NHPC, formerly National Hydroelectric Power Corporation, said in November 2008, it had postponed a planned share sale after global equity markets crashed.

NHPC plans to spend Rs 28,000 crore to more than double generating capacity by 2012. Of this, Rs 11,000 crore would have come from its own cash and the IPO and Rs 17,000 crore from borrowings.

The company will offer 168 crore shares, consisting of 112 crore new shares and 55.91 crore shares owned by the Indian government, according to the offer document submitted to the Sebi. The proceeds will be used to partly pay for the construction of seven hydropower plants.

The stake of the government, which fully owns NHPC, will decline to 86.4% after the issue.