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Government will use an Offer for Sale to sell up to 4.92% of SJVN after the stock increases by 135% in 2023

Sep 21, 2023

By: BlinkX Research Team

According to an exchange filing, the government intends to sell up to a 4.92 percent share in the hydroelectric power producer SJVN Ltd.

With a green shoe option to sell an additional 9.66 crore shares or 2.46 percent of the entire equity, the base offer will have a maximum share sale of 9.66 crore, or 2.46 percent of the total equity.

The OFS's floor price has been set at Rs 69 per share, which represents a 15.6% drop from Wednesday's closing price.

The SJVN OFS will be available to non-retail investors on September 21 and to retail investors on September 22, respectively.

The government could get almost Rs 1,600 crore from this share sale if the OFS is fully subscribed, including the greenshoe option. This computation is based on the company's Wednesday closing price.

The government owned 86.77 percent of SJVN as of the June quarter. Even with the full 4.92 percent ownership, the government would still own 81.85 percent of the company's shares, which is around 6% more than the minimum public shareholding requirements of a promoter stake of 75%.

In addition, the government owned an excess share of more than 11% in SJVN, which had a value of around Rs 3,300 crore as of Wednesday's closing price.

The board of SJVN will also convene on September 23 to discuss the possibility of raising funds using the asset securitization strategy. 

The state-run company and the Power Finance Corporation Ltd. (PFC) earlier in the day inked a Memorandum of Understanding (MoU) for financial support of projects.

The MoU relates to a wide range of projects from a diverse portfolio, with a focus on thermal generation and renewable energy initiatives.

SJVN's stock closed the day on Monday at a record high of Rs 82.1, up 7%. The stock has gained over 100% in a calendar year for the first time after rising 135 percent so far this year.