NHPC shares were under pressure in early trade on Tuesday, June 2, after the Government of India launched an Offer for Sale (OFS) in the state-run hydropower company with a floor price of ₹71 per share.
The stock opened at ₹74.73 and was trading at the same level in early trade, down 3.2% from its previous close of ₹77.20. The decline comes as investors reacted to the government’s decision to dilute a part of its stake in the company through the OFS route.
According to the official announcement, the government will sell up to 6% of NHPC’s equity through the OFS. The base offer comprises 3% of the company’s paid-up equity capital, with an additional 3% green shoe option available in case of strong investor demand.
The floor price for the OFS has been fixed at ₹71 per share, representing a discount to the stock’s previous closing price. The offer opens for non-retail investors on June 2, while retail investors can bid on June 3.
The stake sale forms part of the government’s broader disinvestment and capital-raising programme. In recent months, the Centre has used the OFS route in several public sector enterprises. Earlier this year, the government divested a stake in Coal India through an OFS, while it also reduced its holding in Bank of Maharashtra as part of its ongoing efforts to meet public shareholding norms and raise resources.
Market participants typically view OFS announcements as a near-term supply overhang because a large number of shares become available at a discounted price. This often leads to temporary pressure on the stock price ahead of the transaction.
NHPC is one of India’s largest hydropower companies and has diversified into solar and other renewable energy projects in recent years. The company plays a key role in the country’s clean energy expansion plans and continues to develop hydroelectric and renewable projects across multiple states.
Investors will closely track subscription levels in the OFS over the next two trading sessions, as strong demand could provide an indication of institutional appetite for the stock despite the discount offered.
Disclaimer
This article is based on publicly available information and company-related disclosures. It is intended solely for informational purposes and should not be construed as investment advice. Investors should conduct their own research before making investment decisions.