Bhanshali, Uday Kotak on NHPC IPO

The NHPC initial public offer (IPO), the first one this year from the government's stable, is being flagged off in the next few days’ time. NHPC will go on to raise up to Rs 4,000 crore. Rs 2,000 crore is an offer of sale from the government and the rest is being raised by the company. It is also significant because this is not a private sector IPO. There was a lot of talk in the budget about the lack of disinvestment but a few weeks after that, this is the first off the block from the government’s stable and surely more will follow.
This is a significant move and comes close on the heels of the Adani Power IPO, which has been over-subscribed. Usually we have seen that the primary market revivals are stoked by government supply of paper and this is a very significant one that is starting of.

What is NHPC all about?

NHPC is a government of India Enterprise with an objective to plan, promote and organise an integrated and efficient development of hydroelectric power in all aspects. Later on NHPC expanded its objects to include other sources of energy like Geothermal, Tidal and Wind.


SK Garg, CMD, NHPC said that as on date NHPC’s capacity is 5,175 megawatts with 13 power stations and a huge order book, adding that the company aimed at reaching a capacity of 9,500-9,600 megawatts in four years time. “We are working on 11 projects with a capacity of 4,622 megawatt.”


ABL Srivastava, Director – Finance, NHPC said that all of NHPC’s project were well financed for and that it would therefore not require any further equity financing from the government for these projects. “We don’t need any further equity from the government. From March 7 no government equity is coming and the part of this IPO proceeds will be utilized for these projects.”

What does it hold for retail and institutional investors, and is it the starting point of a much larger disinvestment programme from the government?


Uday Kotak, Executive VC & MD, Kotak Mahindra Bank the markets would receive the disinvestment well because a company like NHPC is a solid company on the ground. “It has existing capacity, you are not necessarily looking too much into the future. You are looking at what is now and real.”
He commended the government’s efforts and said “I think disinvestment process is moving forward and the government of India is moving forward steadily on that.”


Vallabh Bhanshali, Chairman, Enam Securities said, “This disinvestment is going to be a corner stone of that policy. I think the commitment of this government was astounding.”
According to Bhanshali, one business that looks the best in this country for the next 15-20 years is the power business.