NHPC becomes first CPSU to undertake buyback of its equity shares

NHPC's Indira Sagar power station

NHPC Limited (NHPC) has given the government a consolation prize as the Miniratna public sector enterprise has got the distinction of being the first PSU in the country to undertake buyback of its equity shares. As the government is grappling to achieve the target of Rs 40,000 crore through disinvestment and with only couple of months left this fiscal, the PSU’s move will give finance minister...

a big relief and no doubt the power major has received appreciation from department of disinvestment, ministry of finance for successful completion of the buyback, the power company said in a press release. The government of India has received Rs 2131.28 crore as proceeds against the shares purchased by NHPC, 10 percent of the total paid-up equity capital of NHPC, the release added.

The board of the company in its meeting held on October 24, last year approved the buyback offer.

In terms of the SEBI buyback regulations, 15 percent of the buyback offer size was reserved for the small shareholders and the remaining equity shares were to be bought back from general category of all shareholders other than small shareholders.  The buyback offer has got good response from the investors’ group to the extent of 115.94 percent of the buyback offer size, the release added.

A total of 3786 valid applications were received by NHPC under which 142,62,25,823 equity shares were tendered for buyback. The reserved category for small shareholders has been the major beneficiary of the buyback offer.  3374 valid applications were received from the small shareholders under which a total of 65,43,931 Equity shares were validly tendered, and all the equity shares validly tendered by them have been accepted in full under the buyback offer.                

Under, the general category, 411 valid applications were received under which 18,96,07,615 equity shares were tendered for buyback, out of which 11,63,71,310 have been accepted under the buyback offer.

Post buyback, the government’s stake in NHPC has been reduced to 85.96 percent from 86.36 percent. The buyback has the immediate effect of increasing the book value of the company by 1.68 percent to Rs 23.00 per Equity Share, return on equity by 9.30 percent and earnings per share by 11 percent based on the annual result of FY 12-13.

NHPC was incorporated in 1975 with an authorised capital of Rs 2000 million and 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 development of power in all its aspects through conventional and non-conventional sources in India and abroad. At present, With an investment base of over Rs 3,87,180 million, NHPC is among the top ten companies in the country in terms of investment.