NHPC IPO to hit capital markets on Aug 7

Initial public offering (IPO) of Hyderabad based National Hydroelectric Power Corporation (NHPC) will hit the capital markets on August 7, 2009. The price band of the issue which closes on August 12, 2009 has been fixed at Rs 30- Rs 36 a share.

The issue comprises of 16.77 billion equity shares of Rs 10 each to be decided through 100% book building process. This comprises of a fresh issue of 1,118.25 million equity shares by the company and an offer for sale of 559.12 million equity shares by the president of India acting through the ministry of power, government of India. The issue also comprises a net issue to the public of 1,635.44 million equity shares and a reservation of 41.90 million equity shares for subscription by eligible employees.

The issue shall constitute 13.64% of the post-issue capital of the company. Government plans to divest a total of 13.64% stake via the public issue.

This Issue has been graded by ICRA Land has been assigned a grade of 3/5 indicating average fundamentals. The IPO Grading is assigned on a five-point scale from 1 to 5, with IPO Grade 5/5 indicating strong fundamentals and IPO Grade 1/5 indicating poor fundamentals.

While the company will not get a share in any proceeds derived from the follow on public offer, it plans to deploy the fresh proceeds from an issue towards to part finance the construction and development costs of certain of our projects, namely, Subansiri Lower, Uri ? II, Chamera - III, Parbati ? III, Nimoo Bazgo, Chutak, and Teesta Low Dam ? IV. Part of these proceeds would also be used towards funding for corporate general purpose issues.

Of the total equity float, at least 60% of the net issue shall be allocated on a proportionate basis to qualified institutional buyers (`QIBs`), of which 5% shall be available for allocation on a proportionate basis to mutual funds only and the remainder shall be available for allocation on a proportionate basis to all QIBs, including mutual funds, subject to valid Bids being received at or above the issue price. In addition, in accordance with Rule 19(2)(b) of the SCRR, a minimum of 2 million securities are being offered to the public and the size of the net issue shall aggregate to at least Rs 100 million. If at least 60% of the net issue cannot be allocated to QIBs, then the entire application money will be refunded forthwith. Further, up to 10% of the net issue shall be available for allocation on a proportionate basis to non-institutional bidders and up to 30% of the net issue shall be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid bids being received at or above the issue price.

NHPC is a hydroelectric power generating company dedicated to the planning, development and implementation of an integrated and efficient network of hydroelectric projects in India. The company is involved in all aspects of the development of hydroelectric projects, from concept to commissioning.

It has developed and constructed 13 hydroelectric power stations and our current total installed capacity is 5,175 MW. Its current total generating capacity is 5,134.2 MW, which takes in to account a downgrade of the capacity ratings of the Loktak and Tanakpur power stations by the CEA. This total installed capacity and total generating capacity includes two power stations with a combined capacity of 1,520 MW, constructed and operated through its subsidiary, NHDC. NHPC is presently engaged in the construction of 11 additional hydroelectric projects, which are expected to increase the company`s total installed capacity by 4,622 MW. Besides, It is also awaiting government sanction for a further five projects with an anticipated capacity of 4,565 MW.