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Govt firms shy away from planned IPOs

business Updated: Sep 29, 2008 23:04 IST
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Choppy market conditions are likely to delay the much-awaited initial public offerings (IPO) of state-run NHPC (formerly known as National Hydro Power Corporation), Oil India Limited (OIL) as also that of National Aviation Company of India (Nacil).

"The NHPC board will review about IPO slated for October. The market conditions look uncertain for the IPO as of now," Minister of State for Power Jairam Ramesh said.

NHPC plans to issue 167 crore-equity shares of Rs 10 each. This would result in the dilution of 15 per cent of government’s holding in the hydroelectric power major. Currently, the government owns owns 100 per cent stake in the company.

NHPC has a paid-up capital of Rs 11,500 crore, comprising of 1150 crore equity shares of Rs 10 each.

NHPC’s net profit during 2007-08 stood at Rs.1,004 crore—up from the previous year’s Rs. 925 crore.

NHPC had filed the Draft prospectus with the market regulator last month, but had not yet filed the final prospectus.

The recently integrated National Aviation Company of India (Nacil), formed after the merger of Air India and Indian Airlines, was also planning to float a public offer, which now looks set to get delayed.

“One has to be brave to venture into the (capital) market,” civil aviation minister Praful Patel said.

OIL, the country’s second largest oil exploration company, planned $500 million (Rs 2,250 crore) initial public offering is also likely to get delayed due to adverse market conditions.

“If the market situation continues to remain grim the company might reconsider the timing of the IPO,” said a source close to the development.

“The company is going as per the schedule but if the market weakens, it will decide accordingly.”