NHPC IPO By August; Plans Hydro Projects In J&K
The country’s biggest hydro power utility National Hydroelectric Power Corporation (NHPC) is all set to hit the market with an initial public offering (IPO) by August 2008.
Jairam Ramesh, Minister of State for Power declared that there will be no further postponement in the IPO launching as it is very critical for the company’s success.
Mr. Ramesh also stated that the company will be granted a mini-ratna status.
Initially, the IPO was scheduled for last year, but it got delayed because of the lack independent directors on the board. Appointment of non-official directors is a compulsory condition for any company to float an IPO.
According to SEBI guidelines, 50% of the board must be of non-official directors. The company has already nominated four non-official directors, and the remaining three will be on the board shortly.
The company will soon sign a joint venture (JV) deal with the Jammu & Kashmir Power Development Corporation (JKPDC) in order to explore and construct three power projects on Chenab Pakal Dul-100 mw, Kiru-600 mw, and Kawar-520 mw.
Besides this, NTPC has also signed a memorandum of understanding (MoU) with Arunachal Pradesh (AP) government for the 2,000-mw lower-Subansiri project. The company is also making discussions with AP govt for the upper and middle Subansiri projects.
NHPC’s paid up capital of Rs 115 billion includes 10% fresh equity inaddition to 5% disinvestment. The shares would have a face value of Rs 10 each and the IPO would lift a minimum of Rs 15.90 billion.
The IPO proceeds would be utilized to part finance the Rs 280-billion expansion plan. NHPC aims to make 17,010 million units of electricity in the existing fiscal (2008-09). Besides, the company also aims to achieve gross sales of Rs 25 billion.