NHPC OFS Opens for Retail Investors Today: Should You Apply? Here's What Analysts Say

The government’s Offer for Sale (OFS) in hydropower major NHPC has opened for retail investors and employees on June 3 after receiving a strong response from institutional investors on the first day of bidding.

The issue was oversubscribed 3.47 times in the non-retail category on Tuesday, prompting the Centre to exercise the entire green shoe option and increase the total stake sale from 3 per cent to 6 per cent.

The floor price for the NHPC OFS has been fixed at Rs 71 per share. With this, the OFS is available at a discount to the prevailing market price of around Rs 75 apiece.

NHPC OFS: Key Details

The government is selling up to 60.27 crore shares, representing a 6 per cent stake in NHPC, through the OFS route. The sale consists of a base offer (3 per cent stake or 30.13

crore shares) and a green shoe option of additional 3 per cent stake or 30.13 crore shares.

Retail investors and eligible employees can place bids on June 3. Employees are also eligible for a reservation portion in the offer.

Govt Exercises Full Green Shoe Option

The strong participation from non-retail investors led the government to immediately exercise the entire green shoe option.

DIPAM Secretary Arunish Chawla said the OFS received an enthusiastic response and was oversubscribed 3.47 times on the first day. He added that allocation would be based on price priority and confirmed that the government would sell the additional shares under the green shoe mechanism.

The move will help the government raise around Rs 4,200 crore from the transaction.

Should You Apply for NHPC OFS?

According to market experts, the offer appears attractive from a valuation perspective.

“The valuation of the NHPC OFS is very attractive at the issue price. Investors can consider subscribing to the issue. The fair value of NHPC is around Rs 90 per share,” said Sunny Agrawal of SBI Securities.

The key attraction appears to be valuation. At a floor price of Rs 71 per share, the OFS offers investors an opportunity to buy NHPC at a discount to the market price. The company remains one of India’s largest hydropower producers and is also expanding into solar and other renewable energy projects.

The strong institutional demand indicates that large investors are comfortable with the valuation despite broader market volatility.

Shares of NHPC was trading at Rs 75.62 apiece on the NSE at 9:40 am on Wednesday, which is 4.66 per cent higher than the previous close of Rs 72.29 apiece.