NHPC OFS over-subscribed 3.47 times on Day 1, opens door for Govt to exercise full 3% green shoe option

The government's Offer for Sale in NHPC Limited received an enthusiastic response from investors on the opening day, with the issue getting over-subscribed 3.47 times on Tuesday. The strong demand from non-retail investors has now paved the way for the government to exercise the entire 3 per cent green shoe option, taking the total stake sale to 6 per cent of paid-up equity.

The government's Offer for Sale in NHPC Limited received an enthusiastic response from investors on the opening day, with the issue getting over-subscribed 3.47 times on Tuesday. The strong demand from non-retail investors has now paved the way for the government to exercise the entire 3 per cent green shoe option, taking the total stake sale to 6 per cent of paid-up equity. Department of Investment and Public Asset Management, Secretary, Arunish Chawla posted on X that "allocation will be on price priority basis" and "government has decided to exercise the entire green shoe option" following the robust response. Retail investors and employees get to bid on June 3.

The NHPC OFS was launched with a base offer of 3 per cent of equity at a floor price of Rs 71 per share, with an additional 3 per cent green shoe option in case of over-subscription. Government proposes to sell 30,13,51,044 equity shares, or 3 per cent of paid-up equity, as the base size. It has the option to additionally sell up to 30,13,51,044 shares under the oversubscription option.

After the oversubscription, the base plus green shoe will represent 6 per cent of total paid-up equity as on March 31, 2026, collectively 60,27,02,088 shares. Up to 45,20,265 shares are reserved for eligible employees, who can apply up to Rs 5 lakh, with allocation considered up to Rs 2 lakh first. The green shoe trigger mirrors the pattern seen in recent CPSE divestments. The government recently completed an OFS for Coal India Limited, too was over-subscribed 8.14 times on day one only. Central Bank of India's OFS too was over-subscribed 2.35 times on day one, though DIPAM has not announced green shoe exercise for that sale yet.

For NHPC, the 3.47x over-subscription on day one from non-retail investors paved the way for the government to exercise the full green shoe immediately, rather than wait for retail bidding. The move will help the Centre mop up more proceeds from the sale at Rs 71 per share while ensuring price priority allocation for investors who bid higher. The transaction is part of the government's ongoing disinvestment drive after successful stake sales in Coal India and Central Bank this year. With NHPC's green shoe now being exercised, focus will shift to retail and employee bidding on June 3. Other major PSU disinvestment proposals, including LIC and IDBI Bank, remain in the pipeline as the government pushes to meet its FY27 disinvestment targets. (ANI)