NHPC to appoint merchant banker for IPO next year

Khairi, Himachal Pradesh, Sep 14 (UNI) State-owned National Hydroelectric Power Corporation (NHPC) will be appointing a merchant banker ahead of its forthcoming Initial Public Offering (IPO) to mop up funds in the face of shrinking budgetary support.

The government has indicated to the Rs 24,000-crore hydro major to get ready for the IPO, NHPC Chairman and Managing Director S K Garg told reporters.

The corporation, which is likely to come out with the IPO next year, will be the third public sector power company after the huge response to NTPC's public offering, which was overscribed nearly three years ago.

The state-run Power Finance Corporation has also decided to bring out its own IPO.

''The government has sounded us out about bringing the IPO and we have started the work,'' said Mr Garg. The corporation is in the process of recruiting a merchant banker to start the initial formalities, he added.

The government has told the company, which is aspiring for the 'Navratna' status, that it should also raise loans from the market.

About 30 per cent of the company's expenditure on projects on ongoing projects in various states amounting to Rs 20,000 crore comes from the Union Budget. The company has also been asked to raise money internal revenue to support its projects.

According to Mr Garg, NHPC plans to raise about Rs 4,800 crore through internal resources during the next seven years. For the rest of its needs, it will be approaching the domestic and international market for long-term loans.

NHPC has already signed two lines of credit totaling Rs 9,000 crore with the Life Insurance Corporation of India, the first for 19 years and the second for 20 years. It is also negotiating a 100 million dollar loan from the international market.

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