We will be a 9,500mw company by 2013: NHPC

NHPC IPO: $1.2bn proceeds to fund 11 projects
It will be the first public sector enterprise to tap the capital markets this year. National Hydroelectric Power Corporation (NHPC) has kicked off its road shows, as it looks to raise up to Rs 6,000 crore. Katya Naidu and Vidhi Godiawala report.
For the first time in its 34-year history, NHPC has 11 projects under construction. At the same time, it is looking at a USD 1.2 billion IPO to fund it. The company wants to double its capacity over four years.
SK Garg, CMD, NHPC, said, "By 2012, we will be commissioning almost 2,300 MW. Two projects will come in the first year of the 12th Plan, which will add another 2,000 MW. By 2013, our company will be something like 9,500 MW company."
The IPO is expected to raise Rs 6,000 crore at the higher end of the price band. Of this Rs 6,000 crore, around Rs 4,000 crore will accrue to the company, Rs 2,000 crore will go to the government for its 5% stake it is divesting.
At Rs 30-36 per share, the IPO is aggressively priced. Bankers hope the uptick in market sentiment and the government's credibility will make it a good bargain.
Vallabh Bhansali, Chairman, Enam Securities, said, "It is a unique company. It is in hydro power, it is a large company, financially very good, and not leveraged like other power companies. A lot of factors have gone into valuing this company."
Falguni Nayar, MD - Institutional Equities, Kotak Mahindra Bank, said, "We are hoping for a positive response because market is improving and investor appetite is improving."
S Vishwanathan, MD, SBICAPS, said, "This issue will be a forerunner for many more issues to come."
NHPC hopes its IPO will see the same strong subscription rush seen by Adani Power's IPO earlier this week, when it was subscribed 4 times on the very first day. Experts point out that NHPC's expansion is not the only thing that hangs in the balance. This IPO could well set the pace for future divestments as well.