India’s National Hydroelectric Power Corp. plans initial public offering

India’s state-run National Hydroelectric Power Corp. (NHPC) plans to sell 13.6 percent of the company in an initial public offering (IPO) to raise up to 25 billion rupees (US$580 million), a banker to the deal said April 5.

Once completed, the IPO would be India’s biggest so far this year and would value NHPC at about US$4.25 billion, making it the second most valuable utility behind another state-run power developer, NTPC Ltd. Enam Financial Consultants, Kotak Mahindra Capital Co., and SBI Capital Markets are the managers to the offer.

NHPC has 11 completed hydro projects of 3,755 MW, 13 under construction of 5,712 MW, 12 in development or investigation totaling 16,400 MW, as well as other joint venture and turnkey projects. (HNN 12/13/06)

The utility plans to sell 1.12 billion new shares in the IPO, while the federal government will sell about 558 million shares, the offer document showed. The offer is aimed at raising between 22 billion and 25 billion rupees (US$510 million and US$580 million), the banker said.

Revenues to build six hydro projects totaling 3,080 MW

The revenues would be used to build new projects to boost company growth, the banker said, which is expected to lure strong investor demand. The offer document said the funds would finance six planned hydroelectric projects with a combined capacity of 3,080 MW.

For the six months ended September 2006, NHPC reported revenues of 15.83 billion rupees (US$367.2 million) and a net profit of 5.85 billion rupees (US$135.7 million). For the year to March 2006, it earned revenues of 23.13 billion rupees (US$536.6 million) and a net profit of 7.68 billion rupees (US$178.2 million), translating into earnings per share of 0.75 rupees (1.74 US cents).

That compares to an earnings per share of 6.7 rupees (15.5 US cents) for NTPC in the fiscal year to March 2006, and 1.6 rupees (3.7 US cents) for private sector hydro utility, Jaiprakash Hydro-Power Ltd., NHPC said in the offer document.

The issue, which may need a grading from a credit rating agency, is expected to open by the end of May or early June, the banker said.

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