• Sat. Dec 9th, 2023

SJVN Stocks Tank 10% As OFS Begins Today; Board To Consider Disinvestment

Last Updated: September 21, 2023, 11:04 IST

SJVN Offer for Sale: A retail investor's guide.

SJVN Offer for Sale: A retail investor’s guide.

The government plans on divesting up to 4.92 per cent stake in hydroelectric power generator SJVN Ltd. via an Offer for Sale

Shares state-run SJVN crashed 10 per cent in Thursday’s trade after its promoter decided to offload up to 9,66,72,962 equity shares via a two-day offer for sale (OFS) that kicked off today. Retail investors can bid in the OFS tomorrow on Friday.

The government plans on divesting up to 4.92 per cent stake in hydroelectric power generator SJVN Ltd. via an Offer for Sale, an exchange filing stated.

The base offer will be to sell up to 9.66 crore shares or 2.46 per cent of the total equity with a green shoe option to sell another 9.66 crore shares or 2.46 per cent of the total equity.

The stock opened at Rs 74.69 against the previous close of Rs 81.75 and cracked 10 per cent to hit the level of Rs 73.53 on BSE.

The floor price of the offer was set at Rs 69, which was at a steep 15.59 per cent discount to SJVN’s Wednesday’s closing price of Rs 81.75 apiece. The President of India, acting through and represented by the Ministry of Power, Government of India, is the seller. The OFS is being undertaken in a bid to achieve the minimum public shareholding norms, as the government still holds 86.77 per cent stake in the company.

SJVN share price has surged 173 per cent from its 52-week lows of Rs 29.90 which it hit on September 30, 2022, on BSE. Year-to-date (as of September 20), the stock has gained a whopping 139 per cent while the Sensex has risen about 10 per cent.

A total of 10 per cent of the offer is reserved for allocation to retail investors subject to receipt of valid bids. A minimum of 25 per cent of the offer shares are reserved for mutual funds and insurance companies.

The eligible employees may apply for shares of up to Rs 5 lakh but bids by eligible employees will be considered for allocation, in the first instance, for an amount up to Rs lakh only. If the employee portion remains under-subscribed, that portion will be allotted on a proportionate basis, for a value in excess of Rs 2 lakh, subject to the total allotment to an employee not exceeding Rs 5 lakh.

Besides, as per an exchange filing, the SJVN’s board of directors is to meet on Saturday, September 23, to consider and approve raising funds through the securitization of assets.

Meanwhile, in a separate exchange filing on September 20, SJVN said it had signed a Memorandum of Understanding (MOU) with PFC for financial assistance to various diversified portfolios of projects including majorly renewable energy projects and thermal generation projects to be set up at a total project cost of about Rs 1,18,826 crore.

“The term loan financial assistance is tentatively proposed at 70 per cent of the project cost, which may be increased for renewable energy projects as per project requirements,” said the company.

Under the MoU, PFC’s financial support in the form of a term loan is tentatively proposed to range from Rs 80,000 crore to Rs 90,000 crore, demonstrating a substantial commitment to the realization of these vital projects. These funds may be further increased to accommodate the specific requirements of the renewable energy projects, emphasizing the adaptability of this partnership to evolving project needs, said that statement.

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