The Government proposes to divest 10 per cent equity of THDC Ltd via initial public offering (IPO). The proposed share sale would fetch Government Rs 500 crore towards meeting its divestment target of Rs 40,000 crore.
The Cabinet Committee on Economic Affairs (CCEA) is likely to give its go-ahead for the IPO shortly. No timeline have been determined for the public issue yet. The government’s stake would come down to 65 per cent post the divestment.
At present, the authorised capital of THDC is Rs 4,000 crore and paid up capital is Rs 3,297.58 crore as on March 31, 2012. The share capital is held by Centre and Uttar Pradesh in the ratio of 75:25. The face value of each share is Rs 1,000.
The Government proposes to offer five per cent discount for retail investors when the shares are up for sale. At the same time, the existing face value of each equity share would be split to shares of face value of Rs 10 each, said a senior Power Ministry official.
Also, the THDC board consists of four functional directors and three Government nominee directors. In order to file the red herring prospectus (RHP) with markets regulator Securities and Exchange Bureau of India (SEBI), it needs to appoint seven independent directors to THDC board.
The employees of THDC would be given a chance to buy the company’s shares to maximum of Rs 2 lakh. The percentage of shares to be reserved for employees would be determined at a later stage.
THDC India was set up in 1988 as a joint venture between Government of India and Uttar Pradesh State. The company had the initial mandate to develop, operate and maintain the 2,400 MW Tehri hydro power project.
The power producer has reported profit and paid dividends of Rs 97.50 crore in 2007-08; Rs 98.00 crore 2008-09; Rs 145 crore in 2009-10; Rs 181 crore in 2010-11 and Rs 212 crore in 2011-12.
Currently, THDC has installed capacity of 1,400 MW. In addition, there are three projects of 1,468MW under construction.