Shares of NHPC, a state-owned hydropower company, dropped nearly 6% on June 2 after the Indian government announced it would sell a 6% stake through an offer for sale (OFS). The shares were priced at a floor of ₹71 each, providing an opportunity for retail and non-retail investors to participate in the sale as part of the government's ongoing disinvestment programme, according to livemint.com.
The government’s decision to offload its stake in NHPC was executed via the OFS route, allowing investors to buy shares at a discount to the prevailing market price. The move is aligned with the Centre’s broader strategy to reduce its holdings in public sector undertakings. The announcement triggered a sharp decline in NHPC’s share price, reflecting market reaction to the dilution of government ownership, as reported by thehindubusinessline.com.
This stake sale is part of a wider government effort to raise funds and improve public finances by divesting from state-owned enterprises. NHPC, being one of India’s largest hydropower producers, is a significant asset in the energy sector. The OFS pricing below market value is a common tactic to attract investors quickly, but it often leads to short-term pressure on the stock price, as seen in this case where shares fell nearly 6%.
The OFS opened on June 2 with the floor price set at ₹71 per share. Market participants will monitor subscription levels closely to gauge investor appetite for NHPC shares amid the government’s broader disinvestment plans. The next key update will be the closure of the OFS and the final allotment details, which will indicate the success of the stake sale.